It Depends – Will amending my trust deed result in a resettlement of my trust?

In this edition of ‘It depends’, associate Sacha Robinson talks about whether amending your trust deed will result in a resettlement of your trust.

Video transcript

Welcome to the latest edition of It Depends. Today, we will consider the question, Will amending my trust deed result in a resettlement of my trust?’

Will amending my trust deed result in a resettlement of my trust?

It depends. However, as a result of recent cases and guidelines provided by the ATO, the risk of resettlement has significantly decreased in recent years.

When will an amendment result in a resettlement?

The current position is that there is unlikely to be a resettlement of a trust, provided that the amendment is prepared in accordance with the trust deed, and that the three indicia of continuity are present, which are: continuity of trust deed, continuity of trust property, and continuity of beneficiaries. For there to be a trust resettlement, there must be a change to one of these indicia so significant that it amounts to terminating the existence of the trust.

Why does it matter if there is a resettlement?

A trust resettlement may result in significant tax consequences and in some specific circumstances, duty consequences as well.

What should I do next?

If you would like further advice about whether amending your trust deed results in a resettlement of your trust, please contact me or a member of our team.