Special Disability Trusts (SDT) – Tax Treatment Issues

Since 2006, families have been able to establish an SDT to provide for the current and future care and accommodation needs of a family member with severe disability (the “principal beneficiary”). SDTs attract social security means test concessions for the eligible contributors and the principal beneficiary.

However, the Capital Gains Tax implications of transferring assets into such a trust have been an impediment. The Government announced in the 2010-2011 Budget it will introduce legislation to remove further income tax barriers that impede families from making financial contributions to a Special Disability Trust. The Government has announced a 4-week consultation period. A Treasury consultation paper has been released and is available on the Treasury website and further information at:

Assistant Treasurer and Parliamentary Secretary for Disability and Carers’ joint media release No 070, 10 May 2011

Tags: tax law