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Take care with interest-free loans to Trusts

20 July 2016 | General

When a person transfers ownership of an asset to a trust in circumstances where the trust does not have the funds to pay a market related purchase price for the asset, a seller (who is a connected person to the trust) will often loan the purchase price to the trust. In such loans, which are not at arm’s length, the seller will often charge a low interest rate or no interest at all to the trust. Treasury has published the Draft Taxation Laws Amendment Bill for comment by 8 August 2016, which introduces a new section 7C to the Income Tax Act to prevent estate duty and donations tax avoidance through the transfer of assets to trusts using interest free or low interest loans.

No coverage for landfill clean-up – not sudden and accidental

19 July 2016 | General

A US Supreme Court reversed a lower court’s decision awarding $9.1 million to an insured company for the company’s defence costs of litigation over a clean-up of a landfill in Massachusetts.

Skydiving accident excluded

14 July 2016 | General

A US federal judge has held that the insurer of a New Jersey airport owed no coverage in an underlying lawsuit stemming from injuries suffered during a skydiving accident because of the policy exclusion for injuries arising out of any parachuting activities. The parachute jumping exclusions stipulated that coverage did not include bodily injury or property damage resulting from any parachuting activity.

No coverage for false vehicle repair history

12 July 2016 | General

A US Supreme Court found that the insurer did not have to defend a motor dealership from a suit brought by an individual who alleged that the dealership had misrepresented that the car he bought had not previously been damaged.

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Question

What do you believe will be the biggest challenge when the COFI framework is finally implemented?

Answer

The cost and complexity of relicensing Demonstrating customer outcomes through data and reporting Embedding a customer-first culture across the business Aligning existing compliance frameworks with COFI requirements

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