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SMSF Trustees: What's in a DRP?
Using Dividend Reinvestment Plans (DRPs) can be an effective method of growing your super or speeding up wealth accumulation outside super.
When DRPs were originally introduced, some companies offered discounts of 5% or even 10%. These days, generous discounts are rare. Expect to see a discount of around 2.5% or less with many companies offering no discount at all.
Calculating capital gains on DRPs can cause headaches when you go to sell the shares. You need to weigh up whether the administration effort or accounting bills is worth the benefit you would get.
Of course if you or your SMSF owned shares in a company but didn't want to invest more money in that stock, it would be silly to sign up to that company's DRP.
How do DRPs work?
Some companies offer their shareholders the opportunity to participate in a DRP. Under these plans, shareholders can choose to use their dividend entitlement to acquire additional shares in the company instead of receiving a cash payment.
Let's say you (or your SMSF) own 20,000 shares of XTY Limited, which last traded at $1. XYZ now declares a three-cent dividend.
For your 20,000 shares, you are entitled to receive $600 in dividends.
If XYZ offered a DRP and you had selected this as your preferred method of payment, the company would effectively use the $600 to buy more shares for you – giving another 600 shares @ $1 each (DRP purchases also attract no brokerage).
Note, of the 400 or so companies paying dividends, just over half (225 at last count) offered a form of DRP and almost a third of these are ETFs or listed investment companies (LICs).
Have we reached the end of the road' for leverage in super?
The Financial System Inquiry's (FSI) interim report suggests that the days are coming to a close for the use of leverage inside super.
Recent comments by former Prime Minister Paul Keating has fuelled speculation that borrowing in super may be prohibited.
Mr Keating noted a "dramatic acceleration" in investor financing linked to the ability of SMSFs to borrow. He associated this activity with the surge in Australia's housing prices, particularly in the capital city markets.
"If I was treasurer today, I would be looking very hard at the whole entitlement or availability of debt to SMSFs. They have gearing available to them and, of course, many of them are taking the option of buying residential property." Mr Keating said.
Since the FSI first sought feedback on restoring the prohibition on direct leverage of borrowing in super, speculation has mounted that the panel will recommend that borrowing in SMSFs be banned.
The new accountant's "limited AFSL", how it works, and what will change from 2016
This is the final part of a 4 part series in which we explore the thin (sometimes, very thin) line that accountants can inadvertently cross when giving advice to their clients. The "line" is of course the need to hold an Australian Financial Services License (AFSL) to cover the provision of that advice.
For the purposes of this series, we're assuming that the client is a retail client under the Corporations Act 2001 (Cth) (Corporations Act).
In Part 1, we discussed the "accountant's exemption", which has the effect of permitting a "recognised accountant" to recommend that someone establishes their own SMSF or dispose of their existing superannuation interest (perhaps to transfer the benefits to an SMSF), where that advice is given in the course of providing advice on the "establishment, operation, structuring or valuation" of the SMSF.
We also flagged, however, the forthcoming removal of the "accountant's exemption", and the new licensing regime that will apply for accountants from 1 July 2016.
This Part 4 will discuss the new licensing regime from 1 July 2016, and the "transitional" arrangements which apply for the period 1 July 2013 to 30 June 2016.
Why remove the "accountant's exemption"?
The removal of the "accountant's exemption" is essentially a product of the "Future of Financial Advice" (FOFA) reforms, which largely took effect from 1 July 2013. In a nutshell, FOFA prescribes a statutory "best interests" duty on AFS licensees and their representatives, and bans a number of payment arrangements involving licensees and their representatives.
As we discussed in earlier articles in this series, accountants are able to provide advice on SMSFs under the "accountant's exemption", courtesy of Regulation 7.1.29A of the Corporations Regulations.
By way of background, let's recall how the "accountant's exemption" operates:
Section 766A(2)(b) of the Corporations Act provides that the Corporations Regulations may set out the circumstances in which a person is taken not to provide a financial service. This takes us to Reg 7.1.29 of the Corporations Regulations, which states that a person who provides an eligible service in the context of conducting an exempt service is taken not to provide a financial service.
"Eligible service" is defined by reference to the definition of financial service in s766A(1) of the Corporations Act. It therefore includes (as is relevant for accountants) providing financial product advice in relation to SMSFs.
"Exempt service" includes (as relevant to accountants giving advice in relation to SMSFs) the following (Reg 7.1.29(5)(a) and (b) of the Corporations Regulations):
"…advice in relation to the establishment, operation, structuring or valuation of a superannuation fund…[where] the person advised is, or is likely to become…a trustee…or director of a trustee…or a person who controls the management…of the superannuation fund."
However, Reg 7.1.29(5)(c)(ii) of the Corporations Regulations requires that the advice does not include a recommendation that a person acquire or dispose of a superannuation product.
So, if we were to stop there, we'd see that a person cannot – without an AFSL – recommend that someone establishes their own SMSF or dispose of their existing superannuation interest (perhaps to transfer the benefits to an SMSF), even if that advice is given in the course of providing advice on the "establishment, operation, structuring or valuation" of the SMSF. The establishment of an SMSF would be considered the acquisition of a financial product.
However, Reg 7.1.29A of the Corporations Regulations provides that Reg 7.1.29(5)(c)(ii) (which is the regulation which provides that advice cannot include a recommendation that a person acquire or dispose of a superannuation product), does not apply if the advice/recommendation is given by a recognised accountant in relation to an SMSF. This is the "accountant's exemption".
Once this Regulation is removed on and from 1 July 2016, however, accountants will generally be unable to advise a person to acquire or dispose of an interest in an SMSF without being licensed in their own right, or an authorised representative of a licensee.
What is the "limited AFSL"?
The "limited" AFSL is essentially a transitional measure, which permits accountants to apply for an AFSL, but with reduced application and compliance requirements. It therefore affords the opportunity to obtain an AFSL but under a less stringent application process and with reduced license conditions which would otherwise apply to "full" licensees. From 1 July 2016, accountants who propose to give advice in relation to the establishment or disposal of an SMSF will need to hold either a "full" or "limited" AFSL, or be the representative of a licensee.
It should be noted, however, that the "limited" AFSL, whilst having less stringent application and compliance requirements, does also limit the types of "financial services" which are able to be provided under the license. Specifically, financial services under a "limited" AFSL are limited to the following:
- providing advice on SMSFs;
- providing advice on superannuation products in relation to a client's existing holding in a super product but only to the extent required for making a recommendation that the person establish an SMSF or advice on contributions or pensions under a super product;
- providing 'class of product' advice on a range of financial products; and
- arranging for a person to deal in an interest in an SMSF.
There are other significant differences between a "full" and "limited" AFSL as well.
Here's a table outlining some key differences between the "limited AFSL" and the "full" AFSL.
|Full AFSL
|Limited AFSL
|Does the "organisational competence" requirement apply?
|The applicant must have responsible managers who hold the qualifications and have the experience set by ASIC in RG 105.There are five options which the nominated responsible managers can meet.
Commonly, responsible managers meet the option which requires the responsible manager to have an undergraduate degree in a relevant discipline and a short industry course to meet the knowledge requirements, and three years out of the last five years' experience as a representative of an AFS licensee
|If the responsible managers nominated are 'recognised accountants', then they do not need to meet ASIC's experience requirements. They will, however, need to meet the knowledge requirements.If an entity obtains a limited AFSL and nominate 'recognised accountants' as the responsible managers, then the entity is subject to a condition that three years after receiving its licence, ASIC can call on the entity to prove its responsible managers have the appropriate knowledge and skills.
|Audit requirements
|A registered company auditor must be appointed to undertake an annual audit of the licensee. A licensee must lodge its profit and loss statement and balance sheet annually.
|If client money is not handled, then the limited AFS licensee can lodge a compliance certificate rather than an audit.However, the licensee will still need to lodge its profit and loss statement and balance sheet annually.
|Application process
|Lodgement of prescriptive Form FS01, core proofs and additional proofs.
|No difference, other than the omission of the requirement that responsible managers lodge two business references with ASIC where those responsible managers are 'recognised accountants' and the application is made during the transition period (i.e. 2013 to 2016).
With the forthcoming removal of the "accountant's exemption", an opportunity exists for accountants to consider the transitional measures currently available, and obtain a "limited" AFSL. It should be noted, of course, that whilst the "limited" AFSL has less stringent application and compliance requirements, it does limit the types of "financial services" which are able to be provided under the license.
Cristean Yazbeck
Head of Financial Services
E email@example.com
© Copyright in this content and the concepts it represents is strictly reserved by Rockwell Olivier, Pty Ltd
Should your SMSF own your business premises? The pros and cons
More SME owners will focus much more closely in coming months on the pros and cons of buying and gearing their businesses premises through their self-managed super funds.
Specialists in superannuation, investment and business advice expect SME owners to consider accelerating any existing plans to gear their business premises through their self-managed super funds. This follows renewed debate about whether to bar future gearing.
The interim report of the Australian government's inquiry into the financial system calls for views about whether superannuation gearing should be prospectively prohibited because it "may create vulnerabilities for the superannuation and financial systems".
Here are 10 critical points to consider when deciding whether your SMSF should acquire business premises, typically through gearing, to rent to your family business:
Sue Prestney, a partner at PwC Private Clients, says that in her experience, family businesses tend to make "excellent" tenants for their SMSF-owned business premises.
Again speaking in regard to her own clients, Prestney says their family businesses typically pay their rent on time to their SMSF. "They look after the premises like it was their own."
Martin Murden, a director of SMSF consulting and auditing with the Partners Wealth Group, says family businesses make "great" tenants provided the business is successful.
And Murden says dealings between a family SMSF as landlord and a family business as tenant can be smoother – regarding such things as rent reviews – than with an arm's-length tenant.
Business real estate is one of the limited types of assets that SMSFs are allowed to acquire from related parties including members.
And business real estate is one of the few types of assets that SMSFs can lease to related parties, including the members' businesses, without a limit on its value under the in-house asset rules in superannuation law.
During an SMSF's accumulation or saving phase, rents are taxed at 15% within the fund while capital gains are taxed at an effective 10% if the property is held for more than 12 months.
And once the business premises are backing the payment of a superannuation pension, fund income and capital gains are tax-free. This means that the SMSF may eventually be able to sell a property in the pension phase without paying CGT on any profits
SMSFs in the accumulation phase can claim the same types of tax deductions as individual investors who buy properties in their own names including negative-gearing deductions for the shortfall between the deductible expenses, including interest payments, and rental income.
SMSF trustees aim to keep the premises of their family businesses in their super fund through generations, with the aim of gaining greater security of tenure for the business as well as business succession and estate-planning benefits.
Under this strategy, an SMSF will need sufficient other assets to pay member superannuation benefits when necessary for older members such as a business's founders.
Business premises held in an SMSF are generally out of the reach of creditors if individual fund members are declared bankrupt – subject to claw-back provisions in the Bankruptcy Act.
While the principals of a troubled family business may need the premises to keep trading, the family SMSF's trustees – who are often the same people – must maintain the fund for the core or sole purpose of paying member benefits.
Additionally, funds are prohibited from providing financial assistance to members, says Murden. This includes giving rent relief to family businesses in financial difficulties.
This can make it to diversify a fund's portfolio to spread investment risks and opportunities.
When preparing their mandatory investment strategies, SMSF trustees must consider such factors as investment risk, portfolio diversification, liquidity of investments, ability to pay member benefits and the members' circumstances.
Peter Crump, superannuation strategist for ipac South Australia, says that super funds are not legally required to diversify their investments but emphasises that trustees must consider diversification when preparing their investment strategies.
Indeed, some fund trustees specifically decide to have SMSF portfolios dominated by a single property asset, such as the premises of their businesses, perhaps after considering the diversification of their other super and non-super investments.
Much will depend on the circumstances.
First, the superannuation tax rate is much lower than most personal marginal tax rates, thus providing potentially lower tax deductions for negative gearing. Second, lenders usually require a much higher deposit for SMSF gearing, which means a property is likely to remain negatively-geared for a relatively short period – if at all.
As well, SMSF trustees should be cautious about relying too much on the possibility that the business premises will eventually be sold when the asset is backing the payment of a pension and thus becomes exempt from CGT.
Crump suggests that trustees recognise that the fund may well sell the property before it becomes exempt from CGT.
SMSFs should gain quality professional advice to ensure compliance with the strict conditions allowing funds to borrow. Mistakes can be costly.
SMSF Trustees must enter a limited recourse borrowing arrangement and a geared asset must be held in a separate trust until the load is repaid. Lenders cannot make a claim against any other assets of the super fund in the event of a default on the loan.
Despite the requirement for a limited recourse loan, an SMSF that defaults on a loan to buy business premises could lose its sizeable deposit plus capital repayments and payments of interests and costs.
Upon a property's forced sale, a defaulting fund would be paid whatever is left after the lender recovers any outstanding amounts including the cost of a forced sale and the discharge of the mortgage.
SELF-managed superannuation funds attacked from all sides
SELF-managed superannuation funds have been attacked from all sides in recent times, coming under fire for supposedly being used as tax avoidance schemes for the rich and powerful.
As a result, the Australian Taxation Office has taken the unprecedented step of coming out in support of the nation's fastest growing super group.
This event all but ensures that the self-managed fund movement will become by far the dominant force in Australian superannuation. The anti-SMSF aggressors must now back off and halt their attacks.
In his keynote address at the Chartered Accountants Australia and New Zealand National SMSF Conference, the Australian Tax Office's deputy assistant commissioner of superannuation, Stuart Forsyth, said that Australia's 534,000 SMSFs and their one million members contribute significantly to the overall success of the superannuation sector and should be "celebrated".
Forsyth declared that overall the compliance of self-managed funds was high and was improving.
And he went further: "Self-managed super funds are here to stay. We can see one million SMSFs, down the track".
Unlike the large super funds, which are regulated by the Australian Prudential Regulation Authority, SMSFs are regulated by the tax office, which ensures they comply with both tax and superannuation regulations.
In supporting SMSFs and their overall compliance with the rules, the ATO has put paid to the negative sentiment of the anti-SMSF brigade, who like nothing more than to sprout its criticism of the fast-growing sector. The organisers of the press campaign against SMSFs remain a secret but it is believed Treasury plus the retail and industry funds engineered it.
The anti-SMSF campaign often portrays SMSFs as a tax avoidance strategy for the wealthy, but the simple fact is that the tax rules for self-managed funds are the same as for all super funds.
While most SMSFs are compliant, there will naturally always be a few bad apples. That's no different to anywhere else.
If Forsyth is right about SMSFs, then the movement could be set to grow significantly.
When the sums were last calculated, self-managed super funds had one third of the $1.5 trillion superannuation pie (total $495bn). They were well ahead of retail and industry funds, and growing fast. Forsyth revealed that SMSFs now control $557bn worth of assets, a rise of $62bn, or 12.5 per cent in a year.
The self-managed super fund market share will continue to increase because they have well over half the superannuation pool being used to pay retirement pensions.
There have also been inaccurate suggestions that self-managed funds are moving rapidly into residential property. While there is no doubt self-managed funds are a force in the residential market, the investment represents a tiny part of the $557bn in SMSFs overall. Some $8.7bn is held by SMSFs under Limited Recourse Borrowing Arrangements. The LRBA growth rate is much less than the overall SMSF growth, again showing that the anti-SMSF brigade has its facts wrong.
The campaign against SMSFs is a devious attempt by bigger players to try to get money flowing back into the big retail and industry funds. It won't work. SMSFs are the future of superannuation and growth in the self-managed sector will continue at a rapid pace.
A "walk through" of a typical accountant's SMSF advice, including tips & traps for the unwary.
This is the third in a 4 part series, in which our Head of Financial Services, Cristean Yazbeck, explores the thin (sometimes, very thin) line that accountants can inadvertently cross when giving advice to their clients. The "line" is of course the need to hold an Australian Financial Services License (AFSL) to cover the provision of that advice.
For the purposes of this series, we're assuming that the client is a retail client under the Corporations Act 2001 (Cth) (Corporations Act).
Typically, an accountant providing any form of assistance to a client in relation to an SMSF is likely to be asked to give at least some of the following (and probably, all) in relation to their clients' SMSF:
- Strategic advice
- Tax & structural advice
- Asset allocation advice
- Investment advice
- Execution advice/services.
Each of the above services has potential AFSL implications. In part 1, we discussed the "accountant's exemption" and the scope under which an accountant could provide SMSF advice without an AFSL. In part 2, we canvassed the fine line between "financial product advice" and "factual information". In this article, we'll walk through the "typical" SMSF-related services that an accountant may be asked to provide, and the licensing implications (if any) of each of those services. We'll look at some tips and common traps that accountants may fall into, and consider some potential opportunities to restructure existing advice templates to ensure no potential adverse AFSL implications arise.
Let's examine each of the above "typical" SMSF-related services.
Strategic Advice
Invariably, an accountant will wish to discuss their clients' strategic objectives, including on matters such as wealth creation, wealth preservation, income needs, risk appetite, and estate planning. These discussions will likely take place at the start of the engagement and as part of the initial client dialogue, and to assist the accountant in determining the scope of his or her engagement.
To what extent do these discussions constitute the provision of "financial product advice" which require an AFSL, or to which an exemption applies?
To the extent that the initial client dialogue merely serves to scope, understand and restate the clients' objectives and is documented accordingly, and that dialogue in itself contains no recommendations, then there is unlikely to be any financial product advice given which would necessitate an AFSL. Refer to part 2 for further information on the distinction between a "recommendation" and "factual information".
Tax & Structural Advice
No accountant-client interaction will be complete if "tax" wasn't discussed. Indeed, tax is likely to be a key motivating factor for investing through an SMSF.
Typical "tax" advice in relation to an SMSF will include at least the following:
- Tax rates that apply
- Contributions caps and excess contributions tax
- Restructuring of assets or creation of entities to minimise tax.
Surely such advice is financial product advice?
Fear not! Accountants should consider the following:
- Tax Agents' exemption under the Corporations Act 2001 (Cth) (Corporations Act)
- "Exempt" services under the Corporations Act as they apply to tax advice.
We talked about each of the above in part 1, but we'll consider them again here.
Tax Agents' Exemption
Section 766B(5)(c) of the Corporations Act 2001 (Cth) (Corporations Act) provides that advice given by a registered tax agent, which is given "in the ordinary course of activities as such an agent and that is reasonably regarded as a necessary part of those activities", is not financial product advice.
"Exempt" services under the Corporations Act as they apply to tax advice
In part 1, we identified s766A(2)(b) of the Corporations Act, which provides that the Corporations Regulations 2001 (Cth) (Corporations Regulations) may set out the circumstances in which a person is taken not to provide a financial service (and thus not require an AFSL covering the provision of that service). This takes us to Reg 7.1.29 of the Corporations Regulations, which provides that a person who provides an eligible service in the context of conducting an exempt service is taken not to provide a financial service.
"Eligible service" is defined by reference to the definition of financial service in s766A(1) of the Corporations Act. It includes (as is relevant for accountants) providing financial product advice in relation to SMSFs.
"Exempt service" includes (as relevant to accountants giving advice in relation to SMSFs) the following (Reg 7.1.29(5)(a) and (b) of the Corporations Regulations):
"…advice in relation to the establishment, operation, structuring or valuation of a superannuation fund…[where] the person advised is, or is likely to become…a trustee…or director of a trustee…or a person who controls the management…of the superannuation fund."
However, Reg 7.1.29(5)(c)(ii) of the Corporations Regulations also requires that the advice does not include a recommendation that a person acquire or dispose of a superannuation product. The "accountant's exemption, though, kicks in (Reg 7.1.29A of the Corporations Regulations) to enable a recognised accountant to provide such advice.
In addition, Regulation 7.1.29(4)(a) of the Corporations Regulations provides that "advice to another person on taxation issues including advice in relation to the taxation implications of financial products", is also an exempt service. However, to be able to rely on this exemption, further conditions need to be met:
- The accountant must not receive a benefit such as a fee or commission (other than from the client) as a result of the client establishing the SMSF.
- The advice must be accompanied by a written statement that the accountant is not licensed under the Corporations Act to provide financial product advice, and that tax is only one of the matters that must be considered when making a decision, and that the client should consider taking advice from someone who holds an AFSL before making a decision on the SMSF.
Asset Allocation Advice
Once an SMSF is established and funds are either contributed or transferred/rolled over to the SMSF, decision making will of course turn to investing those funds. Accountants will invariably be asked for advice on how funds could or might be allocated: should the client purchase property using a limited recourse borrowing arrangement? What about shares? Managed funds? Should the client hold insurance within their SMSF? And so on…
It's not uncommon for accountants to recommend that their clients speak with a licensed financial adviser to deal with such questions. Accountants should bear in mind, however, that there is some scope to advise on such matters without it constituting financial product advice.
Regulation 7.1.33A of the Corporations Regulations provides that a circumstance in which a person is taken not to provide a financial service under the Corporations Act is "the provision of a service that consists only of a recommendation or statement of opinion provided to a person about the allocation of the person's funds that are available for investment among 1 or more of the following":
- shares
- debentures;
- debentures, stocks or bonds issued, or proposed to be issued, by a government;
- deposit products;
- managed investment products;
- investment life insurance products;
- superannuation products;
- other types of asset.
The Regulation covers "superannuation products", which would include SMSFs.
The note to Regulation 7.1.33A also provides, though, that the exemption "does not apply to a recommendation or statement of opinion that relates to specific financial products or classes of financial products."
In essence, this regulation exempts what is often referred to as "broad asset allocation advice" from being a "financial service". So long as it deals with the asset type as a whole, and does not refer to specific financial products or classes of financial products, then the exemption can apply.
Investment Advice
Investment advice in relation to a specific financial product or class of financial product will invariably require an AFSL authorisation.
Execution Services
As we know, persons generally need to hold an AFSL to cover the provision of a "financial service". We've discussed "financial product advice" so far, which is one type of "financial service". Another "financial service" under the Corporations Act is what is referred to as "dealing" in a financial product.
"Dealing" is defined in s766C of the Corporations Act to include (among other things):
- applying for or acquiring a financial product;
- issuing a financial product;
- disposing of a financial product.
Where a person arranges for a person to engage in any of the above, that will also constitute "dealing".
Accordingly, execution-type services provided by an accountant in relation to their clients' SMSFs will need to be examined to determine whether they constitute a "dealing" which requires an AFSL.
Here are some specific examples of common advice/recommendation scenarios involving SMSFs which may fall within some of the exemptions discussed above, and how they might cross the line and require AFSL authorisation.
|Common Question
|Exempt From AFSL
|AFSL Authorisation Required
|Strategic Advice
|Can you review my existing investments and determine whether an SMSF is appropriate for me?
|If the review serves to scope, understand and restate the clients' objectives and is documented accordingly, and that dialogue in itself contains no recommendations, then there is unlikely to be any financial product advice given which would necessitate an AFSL.
|If, in the course of the review, recommendations are made, for example, that other investments may be more appropriate, an AFSL may be required (unless an exemption applies)
|Tax & Structural Advice
|Should I contribute additional funds to my SMSF to tax advantage of concessional contributions caps?
|If the advice is given by a Tax Agent in their ordinary course of business, and/or the advice is limited to the tax implications of contributing to super, the advice will likely be exempt.
Note the disclosure obligations which apply.
|If the advice goes beyond merely considering the tax implications of contributing to super, it may fall outside the statutory exemptions are require an AFSL authorisation.
|Asset Allocation Advice
|How can I structure my holdings within my SMSF?
|Broad asset allocation advice, which does not identify specific financial products or classes of financial products, will not be a "financial service" (eg if it refers to "shares" or "superannuation" generally).
|AFSL authorisation required if the advice is in relation to a financial product or class of financial products (eg XYZ managed fund).
|Investment Advice
|Where should I invest my SMSF assets?
|No AFSL authorisation required unless the advice is in relation to a financial product or class of financial products.
|AFSL authorisation required if the advice is in relation to a financial product or class of financial products (eg shares, managed funds).
|Execution Services
|Can you set up my SMSF for me?
|Advising a client to establish an SMSF, or on how to establish an SMSF, should be exempt from being a "financial service".
|Setting up an SMSF on the client's behalf will likely constitute "dealing" in a financial product.
To the extent that advice-related services are to be provided in relation to a client's SMSF, accountants should be aware of the specific AFSL implications of each of those services, and the available exemptions. In addition, advice documentation should be drafted in such a way which is reflective of the exemption on which the accountant is relying.
For example, if relying on the "Tax Agents' Exemption" on the basis that the advice is given by the agent in the ordinary course of activities as such an agent and that is reasonably regarded as a necessary part of those activities, the factual bases to support such reliance should be clear from the advice. This would entail, for instance, making it clear that the advice is in relation to liabilities, obligations or entitlements which may arise under tax law. Such matters would objectively be seen as being within the ambit of the ordinary course of business of a tax agent.
Cristean Yazbeck
Head of Financial Services
E firstname.lastname@example.com
© Copyright in this content and the concepts it represents is strictly reserved by Rockwell Olivier, Pty Ltd
Divorce, Tax, the Family Company and Section 109J
When the real life upheavals of relationship breakdowns come face to face with complex business arrangements and even more complicated tax rules it can be almost impossible for the parties to know which way to turn.
Business owners often have significant wealth sitting in the Family Company for a whole range of good reasons, including the lower company tax rate. One of the many challenges at Family Law property settlement time is to work out a way of dividing up the pie without triggering unnecessary tax bills.
In recent times the Australian Tax Office has adopted the practice (at least in many private rulings it issued on the operation of section 109J ITAA 1936) that taking cash out of the Family Company pursuant to Family Law orders would not trigger the usual tax costs that arise under Division 7A of the Income Tax Assessment Act. Those rules basically say that if you take money out of the Family Company it will be taxed as a "deemed" dividend. The ATO practice meant that because Division 7A didn't apply there was the potential for very large tax savings.
Unfortunately, the Tax Commissioner has now changed his mind and says that money or property coming out of the Family Company as part of Family Law property settlements will be taxed as dividends. This "new" taxation treatment will generally apply where Family Law orders are entered into from 30 July 2014.
This is a major change to the tax considerations that need to be taken into account when working out Family Law property settlements. Professional advisors and parties to Family Law proceedings should take extra care to ensure they don't inadvertently trigger a tax nightmare by overlooking this important change, or not understanding the maze of other tax rules that need to be considered when they are dealing with family business assets and other property.
If you are a detail person, you can read the Commissioner's new position on Section 109J and some other tax consequences of Family law property settlements in Taxation Ruling TR 2014/5, on the ATO website
If you need practical advice about how to navigate the tax issues that arise in relationship breakdown property settlements, the team at Rockwell Olivier are here to assist.
Written by Damian O'Connor, Tax Principal at law firm Rockwell Olivier. For practical advice about tax issues relating to your SMSF, please contact Damian on +61 3 8673 5523 or email firstname.lastname@example.com.
Dividend washing – Is your SMSF at risk?
Over the past few months the Australian Tax Office (ATO) has been scrutinising "dividend washing", with a focus on self-managed super funds (SMSF).
Dividend washing is a fancy name for a relatively simple arrangement where taxpayers, including SMSFs try to claim two sets of franking credits on what the Australian Tax Office says is a single parcel of shares.
How is dividend washing supposed to work?
Dividend washing aims to take advantage of exchange rules that allow shares to be traded ex-dividend and cum dividend during the same period. The seller (eg, the SMSF) of a share ex dividend gets the benefit of the dividend and the franking credits attached to it. The SMSF, as buyer of the cum dividend share, also aims to get the benefit of the dividend and franking credits attaching to the newly bought share so they get two lots of franking credits – at least that is the plan. This cum dividend market may be attractive to foreign sellers who would not be able to benefit from franking credits in any case.
The Taxation Commissioner does not like these arrangements and says that existing anti-avoidance rules prevent the double franking credits benefits from arising in the first place, but just to be sure the Government has changed the law for distributions made after1 July 2013.
Whether or not the ATO position is technically correct is another question, but given the ATO's strong public statements, taxpayers, including SMSF trustees, should carefully consider their positions and if they decide to take action to undo franking benefits they may have received from dividend washing transactions they should act within the relatively short time frames the Tax Commissioner has given before he puts these transactions under further scrutiny.
Taxpayers who have undertaken dividend washing transactions but self-modify their tax returns will escape penalties if they amend their tax returns by 22 September 2014 or by the deadline specified in any correspondence sent to them by the ATO.
As with any difficult tax or superannuation problem, it pays to consult with your professional advisors before you engage with the ATO.
Written by Damian O'Connor, Tax Principal at law firm Rockwell Olivier. For practical advice about tax issues relating to your SMSF, please contact Damian on +61 3 8673 5523 or email email@example.com.
When a recommendation by an accountant constitutes financial product advice, and where to draw the line.
This is the second in a 4 part series, in which Rockwell Olivier's Head of Financial Services, Cristean Yazbeck, explores the thin (sometimes, very thin) line that accountants can inadvertently cross when giving advice to their clients. The "line" is of course the need to hold an Australian Financial Services License (AFSL) to cover the provision of that advice.
For the purposes of this series, we're assuming that the client is a retail client under the Corporations Act 2001 (Cth) (Corporations Act).
In part 1 of this series, we commented that, to the extent a person gives an opinion or a recommendation which is intended to influence another person to make a decision in relation to an SMSF (or could be seen to be so intended), that will constitute financial product advice, and hence a financial service for which an Australian Financial Services License (AFSL) is required (unless exemptions apply, such as the "accountant's exemption").
Conversely, it must be the case that if a communication falls short of being an opinion or a recommendation, it must not be financial product advice which would necessitate an AFSL (putting aside whether an exemption applies).
Communications which are merely the provision of factual information are generally recognised by the regulators as falling short of being an opinion or recommendation.
So, what's the difference between a "recommendation" and "factual information"?
ASIC takes the view that (Regulatory Guide 36 (RG 36), para. 23):
"If a communication is a recommendation or a statement of opinion, or a report of either of those things, that is intended to, or can reasonably be regarded as being intended to, influence a client in making a decision about a particular financial product or class of financial product (or an interest in either of these), it is financial product advice. Communications that consist only of factual information (i.e. objectively ascertainable information whose truth or accuracy cannot be reasonably questioned) will generally not involve the expression of opinion or recommendation and will not, therefore, constitute financial product advice." (emphasis added)
The key aspect of "factual information" (from ASIC's perspective) is that the communication consists of objectively ascertainable information whose truth or accuracy cannot be reasonably questioned. In the context of SMSFs, this would probably include things such as the following:
- how to establish an SMSF
- information about tax rates that apply with SMSFs
- what "salary sacrifice" means when it comes to SMSFs
ASIC does, however, offer the following caution (RG 36, paragraph 24):
"…in some circumstances, a communication that consists only of factual information may amount to financial product advice. Where factual information is presented in a manner that may reasonably be regarded as suggesting or implying a recommendation to buy, sell or hold a particular financial product or class of financial products, the communication may constitute financial product advice (e.g. where the features of two financial products are described in such a manner as to suggest that one compares more favourably than the other)."
ASIC takes the view (RG 36) that a communication is likely to be "factual information" where there is no value judgement about the communication. "Value judgements" would include things such as:
- the merits of salary sacrificing into an SMSF
- whether an SMSF is more desirable than other investments for tax purposes.
In this regard, ASIC comments that (RG 36, paragraph 31):
"Factual information may be likely to be advice if it is presented in a way that is intended to, or can reasonably suggest or imply an intention to, make a recommendation about what a client should do."
Sounds simple in theory, but in reality most communications between an accountant and their SMSF clients will draw close to the line on whether a value judgement is being made by the accountant in relation to their clients' circumstances, even where factual information is being provided. Moreover, could it be also be said that the mere fact that the accountant sets out "factual" matters about various investment options (for example, an SMSF versus an alternate investment), is itself an implication of what the client should do, and therefore a recommendation? The line is thinner than most people think.
ASIC does offer some assistance in this regard. In one of its "frequently asked questions" (QFS 123), ASIC comments as follows in the context of accountants giving SMSF advice:
"Merely setting out options and discussing the benefits and disadvantages of each option will not necessarily involve a recommendation…It is more likely that a recommendation may be inferred where an option is presented as the only option, or other options are described in terms that indicate that the adviser considers that they will not be suitable for the investor.
For example, the regulations allow a recognised accountant to give financial product advice in relation to the establishment of an SMSF where the client has already decided to set up the SMSF and dispose of interests in another superannuation fund…in order to do this. In this instance, you would only be asked for advice on administrative issues in establishing the SMSF and arranging for the rollover of funds from the…fund to the SMSF. You would not be providing a recommendation about disposal of the client's interest in the…fund.
However, if the client has not yet made the decision to dispose of interests in the…fund, and you explain the superannuation options available, and the general benefits of the different types of fund, you should be careful that you do not imply that it would be appropriate for the client to dispose of their interests in the…fund in order to set up an SMSF. In this instance, you could be making a recommendation about the disposal of interests in the…fund, and would require an AFSL to engage in that conduct.
Let's look at a hypothetical example of an accountant's advice to their client about an SMSF, and the differences between a recommendation and factual information.
Mary, a "recognised accountant", is Peter's accountant. She sets up the business structure for Peter and prepares the accounts and tax returns of the business. She reminds him that the law requires certain payments to be made for superannuation. Peter asks whether she can recommend what to do. Mary says that there are a number of options open, including establishing an SMSF or contributing to a public offer fund, and there are a number of considerations in deciding what to do. For example, SMSFs may suit people who have the capability and interest to play an active role in decisions about the assets underlying their superannuation interests (subject to compliance with investment restrictions) and public offer funds may suit those who want to rely on professional management expertise for those decisions.
Mary says that, as she is not an AFS licensee, she cannot make a recommendation about what kind of superannuation fund Peter should arrange for contributions to be made to, and suggests he speaks to a holder of an AFSL. However, as a recognised accountant, Mary can recommend whether Peter should or should not establish an SMSF.
Mary informs Peter that she knows an AFS licensee named Paul who is able to provide financial advice. Mary informs Peter that she does not receive any commissions or other benefits from Paul. Peter then goes to see Paul for advice about retirement planning. After a detailed analysis of Peter's personal circumstances, Paul recommends that Peter should establish an SMSF. Peter is concerned that he will not have the time or the skills to run an SMSF. Paul informs Peter that an SMSF does require time and effort on the part of the trustees and that all members of the SMSF must be trustees. Peter and Paul agree that Paul will advise Peter on the underlying investments of the SMSF, but Peter will get taxation and accounting advice from a suitably qualified person. Peter decides to retain Mary as his accountant and tax adviser.
Peter asks Mary to set up an SMSF for him, and provide accounting and taxation advice in relation to establishment and operation of the SMSF. Peter explains that Paul has advised him to set up an SMSF and that he is satisfied that an SMSF is the best option for his superannuation. Mary, as a recognised accountant, also recommends that Peter establish an SMSF and informs him of his obligations as a trustee. She does not give advice about what investment strategies the SMSF should adopt.
"Recommendation" vs "factual information"
The provision of factual information about the features of different kinds of superannuation products or the skills needed to be a director of the trustee of an SMSF will also not, of itself, be financial product advice. Mary may also give her opinion about the advantages and disadvantages of different kinds of superannuation products or about what qualities a trustee director should have, provided this opinion is reasonably necessary to, and an integral part of, advice about the establishment, operation or structure of the SMSF (see part 1).
If Mary had recommended that Peter should not set up an SMSF, Mary could still provide factual information about the different types of superannuation fund structures, but could not make any recommendation about which type of superannuation fund Peter should join.
What if Peter does not consult Paul?
Peter may decide that he does not wish to see Paul about retirement planning. He may make his own decision to establish an SMSF. If Peter has decided himself to establish an SMSF he can still ask Mary to set up the SMSF and provide accounting and taxation advice in relation to the establishment and operation of the SMSF. Mary does not need an AFSL to provide these services if she makes no recommendations about what investment strategies the SMSF should adopt.
Accountants should be aware of the differences between a "recommendation" and "factual information", the latter usually falling short of requiring an AFSL authorisation. However, and as ASIC warns, factual information may be likely to be considered financial product advice if it is presented in a way that is intended to, or can reasonably suggest or imply an intention to, make a recommendation about what a client should do.
Cristean Yazbeck
Head of Financial Services
E email@example.com
© Copyright in this content and the concepts it represents is strictly reserved by Rockwell Olivier, Pty Ltd
Who should act as the trustee of your SMSF?
If you are thinking about establishing a self-managed superannuation fund (SMSF), one of the most important factors to consider is who will act as trustee of the Fund.
Most people think the easiest option is to appoint themselves as trustee or another individual with them, in the case of a sole member fund, because they think that using a corporate trustee seems too expensive.
The cost of establishing a company is in the range of $500 to $1000 which includes the ASIC registration fee. A corporate trustee for a SMSF is a special purpose company, therefore the annual review fee charged by ASIC is approximately $45.
These fees are relatively modest compared with the benefits of appointing a corporate trustee of the Fund. Let's explore some of the benefits.
The most important concern for most people is who will remain in control or take over control of the Fund when they are no longer able to act.
In the case of a sole member fund, you don't need to involve another person either as a member of the Fund or to be in control of the Fund. But, if you appoint the wrong person as a co-trustee, they could make decisions about the payment of your benefits against your wishes after your death.
The case of Katz v Grossman [2005] NSWSC 934 shows what can go wrong. The father, Mr Katz, appointed his daughter as co-trustee of his SMSF after his wife died. After Mr Katz's death, his daughter appointed her husband as co-trustee of the Fund. Her brother challenged the appointment but the Court held that the appointment was valid. The superannuation benefits of the Fund were then paid directly to the daughter, rather than according to Mr Katz's wishes, which was equally between his son and his daughter.
If, after the death of his wife, Mr Katz had used a company as the trustee of his Fund, where he was the sole director and sole shareholder then his daughter would not have been left in control of the Fund after his death. Mr Katz's Will appointed both his daughter and his son as Executor, and as the legal personal representatives of his estate, both his son and his daughter would have been in control of payment from the Fund instead of the daughter alone.
These unplanned outcomes can arise in a range of circumstances. In the case of Wooster v Morris [2013] VSC 594, Mr Morris had two daughters from his previous marriage that he wanted to receive his superannuation benefits from his SMSF. Mr Morris and his "new" wife were members and trustees of the SMSF. Approximately two years before his death, Mr Morris made a binding nomination for the payment, on his death, of his superannuation benefits to his two daughters.
After his death, his "new" wife appointed her son as co-trustee of the SMSF. After seeking advice that the binding nomination was invalid, they subsequently appointed a company controlled by the wife, and this company as trustee of the Fund, made a decision to pay Mr Morris' superannuation death benefits to the "new" wife. After extensive litigation, his daughters succeeded in arguing that the binding nomination was valid.
If Mr Morris retained his superannuation benefits in a separate Fund, in which he was the sole member, and appointed a company as trustee of the Fund, where he was the sole director and sole shareholder then his "new" wife would not have controlled the Fund after his death. As Mr Morris had prepared a Will that appointed both of his daughters as his Executor, and as the legal personal representatives of his estate, they would have been in control of payment from the Fund in these circumstances.
There can be other benefits of appointing a corporate trustee. On the death of one spouse/partner, the surviving spouse/partner does not need to consider who to appoint as a replacement/co- trustee, or to change the ownership of assets, as the ownership will remain registered in the name of the company, which continues as trustee.
The Katz and Wooster cases tell us that something as simple as the choice of an appropriate trustee can have very expensive consequences, if appropriate advice is not obtained when estate plans are being made.
Melissa Krajacic is a Senior Associate at Rockwell Olivier practising in estate planning, estate litigation and estate administration. For further enquiries please contact 8673 5500.


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Originally written on That NBA Lottery Pick | Last updated 11/17/14
In case you didn't think that NBA players are just like us, Memphis Grizzlies forward Zach Randolph recently revealed a fear of felines.Randolph was making a special guest appearance on Animal Planet's Pit Bulls and Parolees and while talking about the episode, he revealed that he wasn't a huge fan of cats: "You can't be both a dog lover and a cat lover," Randolph says. "I've got a crazy phobia about cats. For some reason, I'm always thinking they're going to scratch me. If a cat walks up, I'm going, 'Oh no, this dude about to scratch me — I know it!' Cats scare the hell out of me. I love animals, but I'm no cat lover. Guys usually aren't."(Courtesy of Off The Bench)
Original Story: http://www.thatnbalotterypick.com/201...
PLAYERS: Zach Randolph
TEAMS: Memphis Grizzlies
TEAMS: Memphis Grizzlies
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subset: commoncrawl


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Susan L Oconnell
Epsom, NH
Basic information on Susan L Oconnell, Epsom NH. Find Susan L Oconnell's age, gender, possible aliases, relationship status and professional status.
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Susan L Oconnell Has Lived in 2 States
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Oxford, UM honored for green efforts
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O'Reilly is a buffoon
HE doesn't know what they are doing with the info either?!!!
And we just saw proof (the IRS) of another government organization that used information against innocent Americans.
So why would be inclined to believe that the NSA is any different?
"Once you become knowledgeable, you have an obligation to do something about it."- Ron Paul
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The Platner chair...an iconic piece of furniture first introduced in 1966 by American architect and interior designer Warren Platner (1919-2006) and Knoll. A wire metal chair that makes a solid design statement.
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Fun! Baby Name Polls
Hone your baby naming skills and help others. Which baby names are best?
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I'm having my son in 2 weeks and I have yet to pick out a middle name. I love the name Corbin and I really want him middle name to be a biblical name. Which one do you like the best...I could also use other middle names.
okay, I have so many names that i like for my little girl..she came early this morning and we just can't decided on her name. I must have one by tonight.....could you help me by elminating two names PER PERSON. Thank you so much! Carissa, Chloe, Noelle, Josslyn, Miranda, Callie, Gracelyn, Isabella, Lillian, Emma, Terissa, Ariella, Arianna, Aviella, Avalee, Brandi, Jacie, Avery.
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I'm having a boy in 2 weeks. I have fallen in love with the name Corbin but I can't figure out a middle name. I really want him to have a biblical middle name...I could really use more middle names.
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my baby is due in 2 months and he still needs a name
Which is the prettiest?
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General Services Administration, Region 9, San Francisco, California (Respondent) and American Federation of Government Employees, Local 3723, AFL-CIO (Charging Party)
[ v07 p785 ]
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Dr. Allison N. Miller, MD
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- 1301 Medical Center Dr
Nashville, TN 37232
- 1 Office Location
- (615) 322-2386
Dr. Allison N. Miller has been practicing medicine for 13 years. Dr. Miller graduated from the University of North Carolina School of Medicine at Chapel Hill in 2001. She practices medicine in Nashville, TN and specializes in Pulmonary Disease. Dr. Miller is affiliated with Vanderbilt University Medical Center. She speaks English and Spanish.
Gender: Female
Years in Practice: 13 Years
Languages Spoken: English, Spanish
Medical School: University of North Carolina School of Medicine at Chapel Hill
Graduation Date: 2001
Hospital Affiliations: Vanderbilt University Medical Center
Specialties: Pulmonary Disease


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An emergency hand truck for removing injured athletes from a playing field has an approximately horizontally extending frame and a bed suspended from the frame, with a portion of the bed sloped upwardly from the rear to the approximate center of the truck to support the buttock and thighs of a person and sloped downwardly from the approximate center to the front of the truck to support the calves and feet of a person. Wheels are provided to support the truck at the front and rear, the front wheels being swiveled for steering the truck. A back support is pivotably mounted to the rear of the frame and is movable between a horizontal attitude lying over the bed to a sloped position for supporting the abdomen of a person in an inclined position.
1. An emergency hand truck comprising, in combination
an elongated frame member having a front portion, a rear portion, and opposed side members extending along the length of said frame member,
a support bed depending from said frame member, said support bed comprising an array of transverse support members arranged along the length of said frame member and each extending across said frame member and attached at its end portions to said opposed side members and depending from said opposed side members,
individual ones of said transverse support members extending at progressively greater distances from said frame member along the length of said frame member from an intermediate position of said frame member toward the front portion and toward the rear portion of said frame member
a bed surface overlying and supported by said transverse support members, said bed surface extending at downwardly sloped angles from the intermediate position of said frame member toward the front portion and toward the rear portion of said frame member
an adjustable back member mounted adjacent the rear of said truck,
first wheel means mounted at the rear portion of said frame member outside of said frame member at the sides thereof, and extending above said frame member,
second wheel means swivelly mounted to the front portion of said frame member at a location forward of said support bed, and
means for steering said truck by swivelling said second wheel means.
2. An emergency truck as claimed in claim 1 wherein said back member has an operative position and storage position, and further including means for locking said back member in its operative position.
3. An emergency hand truck comprising in combination
an elongated frame member having a front portion, a rear portion and opposed side members extending along the length of said frame member,
an array of transverse support members depending from said frame member, individual ones of said transverse support members depending at different distances from said frame member, each succeeding transverse support member from the rear portion of said frame member to the approximate center of the array depending closer to the frame than the preceding transverse support member, and each succeeding transverse support member from the approximate center of the array to the front portion of said frame member depending at a farther distance from the frame member,
a bed surface overlying and supported by said transverse support members,
an adjustable back member mounted adjacent the rear of said frame member,
means for supporting and facilitating movement of said truck over the surface upon which it rests,
said means comprising a first pair of wheels mounted on opposite sides of said frame member at the rear thereof and a second pair of wheels at the front of said frame member, said second pair of wheels being swivelly mounted to said truck whereby said truck can be steered, and
a handle member pivotally attached to said second pair of wheels for permitting said handle member to be folded down toward the bed of said truck.
4. An emergency truck as claimed in claim 3 wherein said bed surface comprises an open mesh material.
5. An emergency truck as claimed in claim 3 wherein said frame member, said support members, and said back member comprise hollow cylindrical tubular material.
6. An emergency truck as claimed in claim 5 wherein said tubular material is steel.
7. An emergency truck as claimed in claim 5 wherein said tubular material is plastic.
8. In combination with an emergency truck having a back portion which has an operative position and further having a frame and a bed, with the bed extending below the frame and along the length of the truck from the rear thereof to the front, the back portion comprising first and second hollow cylindrical arms having open lower ends
a locking mechanism for holding the back portion in its operative position comprising a pair of diametrically opposed slots in each of said arms adjacent the said lower ends thereof,
a pair of U-shaped brackets opening toward the front of said truck and having first and second legs mounted to said truck at each side thereof and extending upwardly therefrom and having a distal end, each of said brackets being adapted to receive one of said first and second arms,
a locking pin member mounted to said truck and extending upwardly with each of said brackets, each of said locking pins being adapted to fit within the open end of one of said arms,
and a pivot pin extending between said first and second legs of each bracket through said diametrically opposed slots.
9. The combination as claimed in claim 8 wherein said U-shaped brackets and said pin members are mounted to the bed of said truck.
This invention relates generally to hand trucks, and, more particularly, to hand trucks for emergency use, such as transporting an injured athlete from the field of play.
In most types of sports, such as football, track, soccer and the like, the athletes are subject to injuries of varying degrees of seriousness, from pulled muscles to broken bones or concussions. In all cases where trauma has occurred, athletic trainers and doctors are agreed that even a mild injury can be seriously aggravated by the athlete's attempting to walk off of the field, either alone or escorted. Even a pulled muscle for a track athlete can be seriously aggravated by walking or limping, thereby causing further damage and increasing materially his recovery time. It is further agreed among these experts that the injured player should be substantially immobilized in, for example, a fixed position while being removed from the field of play.
Heretofore, where a player has been injured, as in a football game, for example, generally he is encouraged to walk off of the field, usually with the help of other players or trainers. Where the trauma is more serious, a stretcher or litter, or a gurney, which is simply a wheeled stretcher, is used to transport the player off of the field. In the case of the stretcher or litter, several people are required to transport it, and, where the player is large, a common occurrence among football players, transporting him while keeping him on the litter is difficult. In the case of the gurney, the player must lie prone thereon, and generally must be held in place such as by strapping to prevent his rolling or falling off. This is especially true if, as is often the case, the gurney has a high center of gravity, which tends to make it unstable.
In addition to the foregoing, it is generally agreed among experts in the athletic trauma field that there is an optimum position or attitude that the injured party should be in while being transported, and the prone position, which is common to litters, stretchers, and gurneys is actually undesirable in most cases and for most types of trauma.
The present invention, in a preferred embodiment thereof, is a wheeled hand towable truck comprising a tubular frame member from which depend an array of tubular support members of varying length, the members on the ends of the array being the longest and the member in the approximate center of the array being the shortest. Attached to the support member at one end of the truck is a wheel and axle assembly, and attached to the other end of the truck is a steerable wheel assembly adapted to swivel about a vertical axis. A handle is pivotally attached to the swivelable wheel assembly for pushing, pulling and steering the truck.
A plurality of support members extend longitudinally of the truck and are attached to the depending support members to define a bed which slopes upward from the rear of the truck and from a point below the longitudinal support members to the approximate center of the bed, and downward from the approximate center to the front of the truck. A suitable surface overlays the longitudinal support members for affording a comfortable supporting bed surface for the party to be transported.
A back member comprising a frame and support members is pivotally attached at the rear of the truck so that it has a first, stored position lying flat along the top of the truck, and a second, operating position where it forms a preferred angle with the adjacent bed surface. The back frame is adapted to be locked in its operating position and unlocked by a simple action for placing in its stored position.
Accordingly, it is an object of the apparatus of the present invention to provide safe transport for an injured party.
It is another object of the present invention to maintain the injured party in an optimum position while being transported.
It is still another object of the present invention to maintain the injured party securely in position on the apparatus of the invention while being transported, with support for all parts of the body.
The objects, features and advantages of the present invention will become more readily apparent from the following detailed description, read in conjunction with the accompanying drawings.
FIG. 1 is a perspective view of the emergency hand truck of the present invention;
FIG. 2 is a side elevational view of the truck of the invention;
FIG. 3 is a plan view of the bed of the truck of the invention, with certain elements thereof removed for clarity;
FIG. 4 is an exploded view of the details of the back locking mechanism, shown in perspective; and
FIG. 5A and 5B are partial cutaway elevational views of the back frame 36 in the lock position and the unlocked, storage position, respectively.
Referring now in more detail to the drawings, in which like numerals indicate like parts throughout the several views, the emergency hand truck of the present invention, a preferred embodiment 11 of which is depicted in FIG. 1, comprises a tubular frame 12 of, for example, sixteen gauge hollow steel tubing, to which are attached, as by welding, an array of tubular U-shaped support members 13, 14, 16, 17, 18, and 19. As can be seen in FIG. 2, the depending arms of support member 13, the rearmost support, are longer than the depending arms of member 14, which in turn are longer than those of member 16, which is located approximately at the center of the array, which is the approximate mid-point of the length of the truck 11. Similarly, the arms of support member 19, which is the frontmost member of the array, are longer than the corresponding arms of member 18, which in turn are longer than the arms of member 17. The arms of member 17 are, in turn, longer than the depending arms of member 16. From the foregoing, it can be seen that the transverse arms of members 13, 14 and 16 define a plane which slopes upwardly from the rear of truck 11 to the approximate center thereof, and the transverse arms of members 16, 17, 18, and 19 define a plane which slopes downwardly from the approximate center of the truck to the front thereof. As will be discussed more fully hereinafter, the angle of slope of this downwardly sloping plane is greater than the angle of slope of the upwardly sloping plane.
A bed surface 21 of an open mesh material, such as, for example, expanded metal, overlays the support members in a manner which will be discussed more fully in connection with FIGS. 2 and 3, and constitutes the body support for the person being transported.
At the front of the truck 11 is mounted a plate 22 having a depending portion 23, which is affixed to frame 12 as by welding, and to support member 19, also by welding. Plate 22 has swivelly mounted on the underside thereof an axle support bracket 24, the depending ears 25 of which support an axle 26 to which are mounted a pair of wheels 27, 27. Preferably wheels 27, 27 are ball bearing mounted on axle 26, and are equipped with balloon type pneumatic tires. The swivel mounting of bracket 24 is better seen in FIG. 2, and will be discussed more fully in connection with that figure. Extending upwardly from bracket 24, to which it is affixed, through a hole in plate 22, is a pin 28, to which is mounted, by means of a clevis 29 and pin 31, a handle 32, the upper end of which is terminated in a suitable hand grip 33. As can be seen, handle 32 can be pivoted forward and backward, as indicated by the arrows, and turning the handle about the vertical axis defined by pin 28 causes the wheels 27, 27 to turn. Thus the wheel and handle assembly affords a means for pulling or pushing truck 11, and for guiding it. Furthermore, handle 32, by virtue of the clevis and pin mounting, can be rotated back and down to a storage position, as best seen in FIG. 2.
At the rear of truck 11 is mounted a back member 34 having a hollow tubular frame 36 having first and second arms 35, 35 to which are welded strengthening and support members 37 and 38 and a headrest plate 39. Member 34 is shown in its upright, operative position, in which it is supported and locked by locking mechanism 41, which will be explained more fully in the discussion of FIG. 4. Member 34 can be unlocked and rotated forward into its stored position, not shown, by the simple expedient of being lifted clear of locking pins 42 in mechanism 41, and being rotated forward to be against bed 21. While not shown, it is to be understood that suitable cushioning means many be attached to member 34 for the added comfort of the injured person.
A rear axle 43 has mounted thereon wheels 44, preferably equipped with balloon pneumatic tires. Axle 43 is mounted on the bottom of support member 13 by welding or other suitable means, although other forms of mounting axle 43 may be used, especially where it is desired to utilize springs or shock absorbers.
The embodiment of the invention shown in FIG. 1 has been described thus far as being fabricated from steel with the various elements joined by welding, for example. It is to be understood that other types of materials may be used, thus the entire truck 11 may be made, for example, from a plastic of sufficient strength to handle the anticipate loads, which may be molded or glued together to form the truck 11. It is not intended that the invention as described be limited to steel components, the various other suitable materials being well within the scope of the invention.
In FIG. 2 certain of the details of truck 11 are more clearly shown. It can be seen, for example, that the depending portion 23 of plate 22 terminates in a lip passing under support member 19, and that a strengthening member 30 is provided. The swivel arrangement 35 for bracket 24 is shown in dashed lines, and is of conventional, known construction. It is desirable, although not necessary, that the swivel be of ball bearings to facilitate turning the bracket 24 and wheels 27. In addition, handle 32 is shown in its stored position.
A plurality of flat support members 46, 46 are mounted on and attached to support members 13, 14, 16, 17, 18, and 19 for strengthening the structure and for furnishing continuous support for bed 21. The support members are shown more clearly in FIG. 3, which is a plan view of truck with back member 34 omitted, for clarity. In addition to longitudinal flat support members 46, 46, there are provided support members 47, 47 and 48, 48 as shown. These support members, which may, for example, comprise three-sixteenths of an inch by one and one-half inch steel slats supply ample support for bed 21, while affording a degree of resiliency for additional patient comfort. Locking and support mechanism 41 may be attached, as by welding, to support member 13, as shown in FIG. 3 or to the rear ends of support members 46, 46, as shown in FIG. 4. Bed 21 is preferably cut out to clear members 41.
FIG. 4 depicts details of the locking mechanism 41 for hollow back frame 36 in which a U-shaped bracket 51 is shown welded or otherwise attached to member 46. Arm 35 has a pair of longitudinally extending diametrically opposed slots 53 and 54 extending upwardly from adjacent the end thereof and a pin 52 mounted in bracket 51, as shown, passes through the slots 53 and 54. Frame 36 is adapted to fit over a pin 42, which holds the back 34 in place in its operative position, as best seen in FIG. 5A. When the truck 11 is not in use, back 34 is placed in its storage position by the operator lifting up on frame 36 until the bottom thereof clears pin 42, and then rotating the back 34 forward to its storage position, as best seen in FIG. 5B.
The invention as just described comprises an emergency hand truck in which a disabled patient sits down within the frame of the truck thereby being protected and laterally supported within the truck, while his back rests against an angled back support, in which the angle is preferably in the range of 100� to 120� to the horizontal. The patient's buttock and the upper parts of his legs, i.e., thighs, are supported by the bed of the truck angling upwardly from the back support and the backs of his knees are supported at the transition of the bed from the upward angle (taken from the rear of the truck) to the downward angle, which downward angled portion of the bed supports his calves and feet. The back support allows the abdomen, head and arms to be supported at a sloped or reclined attitude so as to minimize the tension on the calves and thighs of the patient. Thus, virtually all parts of the body are well supported at optimum angles and positions, while the body is restrained from lateral movement. Various types of cushions and pillows, which have not been shown, may be used to ease further the patient's discomfort.
The bed surface 21 of the truck lies below the frame 12, producing a low center of gravity of the truck, which, in conjunction with the front wheel location, reduces any tendency of the truck to tip over when being loaded or operated.
An added benefit of the unique structure of the present invention is its versatility. Thus, it is possible to use the truck as an equipment transporter for example, either with the back in its upright position or in its stowed position.
The features and principles of the present invention have been illustrated in the foregoing description of a preferred embodiment thereof. It will be apparent to workers in the art that numerous changes or alterations may occur thereto without departure from the spirit and scope of the invention, such as, for example, providing a motor or other propulsion means for the truck. It would further be obvious to replace the wheels of the truck with skis, for example, for use on snow surfaces.
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1971 Porsche 914 '71 Porsche 914, green with brown interior, great candidate for restoration and the motor turns freely by hand. For $3,950 USD If you have... More
This 914 was family owned 1st by my uncle and then the nephew form the time it was purchased new. I am the 3rd... More
PORSCHE: 1971 914, green with brown interior, great candidate for restoration, motor turns freely by hand, for $3,950. Beverly Hills Car Club Inc, 310-975-0272,... More


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- Iran Would Not Terminate Gas Deal With Pakistan
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- Measures afoot to deal with PTIs Nov 30 protest
- Seven families have hijacked Pakistan: Shaikh Rasheed
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Top Stories
Dated: 2012-05-16
Tape also contains messages of Adnan Rasheed who was allegedly involved in plotting the murder of former president Parvez Musharraf.
A 34 minutes video is being sold openly in various areas of North Waziristan and South Waziristan in which Hakimullah Mehsud is briefing his warriors team through map containing different routes leading towards Bannu jail and also briefing the inside situation of the jail.
The video tape shows some 150 fighters including Hakimullah Mehsud and Wali ur Rehman gathered at one place and form a strategy to assault the jail and attacked the jail with heavy weaponry without facing any hurdle from police side. Other scenes after the attack are also present in the tape having top militants who managed to escape from the jail.
Further scenes show the cheerful moments when top leaders of Taliban are congratulating Adnan Rasheed for managing escape and fighters on successful mission. All the top militants demanded the release of Dr. Aafia Siddiqui.
Taliban sources said the actions were carried out for 1 and a half hour to 2 hours and managed to release 384 prisoners in a pre-dawn assault. Adnan Rasheed stated in a video tape he was certain that his friends would release him from imprisonment some day. No response has been observed yet from the sides of police authorities and provincial government.
On April 15, More than 150 heavily armed Taliban militants traveling in several vehicles attacked the Central Jail in Bannu, Southern District of Khyber Pakhtunkhwa, releasing 384 prisoners in a pre-dawn assault. The Tehreek-e-Taliban (TTP) had claimed responsibility for raiding the jail. TTP had claimed that they attacked the jail with hundreds of fighters.
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Dai Of The Dead: Must Have Caskets – Adventures In Event Planning
Hey all! Welcome back to my friendly, and oh so Dai-ish, column. Ok, I really don't know what that means but I am going to use it anyway. This column is going to be detailing my experience with putting together a WOMEN IN HORROR event as will probably the next few. And OH MAN do I have a lot to say. Both good and some not so good but I think it will be entertaining … Continue reading


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Flagstaff Snowplay Package
Package includes room, map of the local snowplay areas, 1 snowman making kit, 1 sled, hot cocoa and chocolate chip cookies
Sedona Getaway: Intuitive Reading and/or Energy Healing & Balancing
Enhance your Sedona visit with Intuitive Readings and/or Energy Balancing and Healing with Kavitaa. Sedona day retreat packages.
Air Charters from Phoenix/Scottsdale now available to Tombstone!
Begin the day with a 90 minute scenic, narrated flight over the lush farmland and pecan groves of southern Arizona to a landing strip in the desert about 3 miles from town.
Enjoy modern transportation into the town of Tombstone and leave the present world behind as you step back into the 1800's Wild West. A walking tour by Dr. Jay will give you an overview of the history of this "town that wouldn't die"; from it's mining origins, through it's heyday as the largest city in the Southwest, to the days of the Earp Brothers, Doc Holliday and the gunfight at the OK Corral. After the walking tour you will be 'on your own' to take in the sights and attractions that most appeal to you. We will give you a list of what we think are the highlights that shouldn't be missed and a few options for lunch spots. The attractions and lunch are not included in the tour price with the exception of Dr. Jay's walking tour. At 1:00pm we will regroup and depart from the Gazebo in the City Park for the short ride to the airport and your flight back to the present day. This tour departs at 8:00am from the Deer Valley Airport in north Phoenix and returns to Phoenix by 2:30pm. Complimentary transfers from select hotels in metro Phoenix and Scottsdale are available. Tour cost is $349.00 per person plus $20.00 per person fuel surcharge. Gratuities are separate and depending on what attractions you choose, there will be various tour guides.
Price: $369 - $399
P.O. Box 1431
Hereford, Arizona
Restrictions48 hour cancellation policy – Three person minimum for flight to go.
Offer Valid:
Feb 03, 2014 — May 04, 2014
P.O. Box 1431
Hereford Arizona
Phone: 520.803.6713
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