After reviewing literally thousands of trust deeds, it still
amazes us to see how many have not been updated, or at least
reviewed, by a tax professional following Bamford and the
2011 'trust streaming' amendments to the Tax Acts.
What is the easiest way to check whether a trust deed should be
The easiest way to check whether a trust deed should be reviewed
is to look at the definition of 'income of the trust fund'
or 'net income'. If your deed says that income is the same
as 'section 95 net income', or there is no definition, then
it probably needs amending.
If your unit trust receives franked dividends, the trust must be
a 'fixed' trust in order to get the benefit of any franking
If your unit trust has a unitholder that is a superannuation
fund, there is a material risk that distributions from the unit
trust to the superannuation fund will be taxed as
'non-arm's length income' (at the top marginal rate) in
the light of the decision in MH Ghali Superannuation Fund
( AATA 527).
If either of these situations apply, the trust deed will almost
certainly need to be amended as very few existing unit trusts
qualify as fixed trusts under the stringent requirements in the Tax
How we can help you
We review discretionary trust, unit trust and hybrid deeds to
determine whether they should be amended. If a deed needs to be
amended, we prepare the necessary documents for a fixed fee.
At the same time, we also review the deed to make sure it
includes the latest powers requested by financiers.
It is particularly important that the trust deed is reviewed
well before the end of the financial year to avoid the 30 June
Contact a member of our commercial team to discuss the process
to review and amend your trust deeds.
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The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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