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acis@acis.net.au
acis.net.au
Trust Amendment Order Form
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Trust Details
Please submit a copy of the original trust deed (and any documents that have amended it) together with this order form.
Amendment Details
select the types you require
Provide amendment details here:
Revenue NSW requires that, where any named beneficiary is a foreign person, their name must be deleted from the trust deed as a beneficiary in order to exclude them. If you would like us to amend the trust deed to delete the names of foreign persons listed as beneficiaries in the trust deed, please provide those instructions above. Additional fees will apply. As amendments of these types have the effect of changing the beneficiaries, specific duty/tax advice should be obtained prior to execution.
Current Trustee Details
IMPORTANT: Full, verifiable names are required.
(include ACN if Company)
(First Officer listed to be Chairperson, first 2 Officers to be signatories)
Current Principal/Appointor Details
(include ACN if Company)
(First Officer listed to be Chairperson, first 2 Officers to be signatories)
Current Unit Holders/Other Roles
Change of Trustee/Appointor Details
IMPORTANT: Full, verifiable names are required.
(include ACN if Company)
(First Officer listed to be Chairperson, first 2 Officers to be signatories)
(please select)
(select if applicable)
(include ACN if Company)
(First Officer listed to be Chairperson, first 2 Officers to be signatories)
(please select)
(select if applicable)
(include ACN if Company)
(First Officer listed to be Chairperson, first 2 Officers to be signatories)
(please select)
(select if applicable)
(include ACN if Company)
(First Officer listed to be Chairperson, first 2 Officers to be signatories)
(please select)
(select if applicable)
Additional Information/Special Instructions
Trust Deed Upgrade - General Principles
According to the High Court of Australia, in relation to trust income:
1. The term “share” in section 97 of the Income Tax Assessment Act 1936 (the “Act”) means a “proportion” of the net income of the trust. The court rejected the notion that the term should refer to a quantum of income distributed to a beneficiary. In other words, a beneficiary might be liable for tax on amounts not received or distributed to it. This is particularly relevant where the taxable income of the trust exceeds the income actually distributed by the trustee. The proportionate approach means that beneficiaries will be assessed for tax on the proportion of net income of the trust equal to the proportion of trust income distributed to them.
2. The trust deed for the trust can define what income is. This means that, provided the trust deed has an adequate definition of income and the trustee has the discretion to determine what is or is not income at any time, the trustee can include in income items that might not otherwise be income (e.g. capital gains).
Many older trust deeds do not have the necessary provisions to enable them to take advantage of these principles. Without those provisions:
  • the trustee may not be able to determine how income is to be determined in any financial year;
  • the trustee may not be able to distribute capital gains or franking credits;
  • the trustee may not be able to distribute specific categories to particular beneficiaries;
  • beneficiaries may be taxed on amounts they are not entitled to and have not received.
While updating the income provisions outlined above, the Trust Deed Upgrade also addresses the ever increasing requirement to expand on the trustee’s general and investment/banking powers, by updating those powers to reflect our current provisions.
Where you decide that changes to the trust deed are necessary or desirable, Acis will provide a deed of amendment to incorporate these changes using our standard clauses. We will provide our standard form of amendment only in the absence of any additional instructions.
Important Note
Great care needs to be taken when amending trust deeds to incorporate these changes, as the trustee must exercise caution to ensure that the trust is not resettled. Resettlement may result in capital gains tax or stamp duty liabilities.
While we do not provide an opinion on possible resettlement, CGT, or stamp duty matters, if an issue is identified, we will refer it to you for instructions before proceeding.
Foreign Person Exclusion
Selecting Foreign Person Exclusion when ordering a trust deed amendment will indicate to us that you would like the deed to exclude foreign persons for the purposes of surcharge foreign person duty and land tax in all Australian jurisdictions for which these surcharges apply, except NSW. To prevent inadvertent foreign person surcharge duty and land tax liabilities in NSW, the trust deed must irrevocably exclude foreign persons. If you would like the trust deed to do this, you can select NSW Foreign Person Exclusion when ordering the trust amendment. This means that the trustee of this trust would not be able to distribute to foreign persons and this could not be changed. If you elect for the trust deed to irrevocably exclude foreign persons, the trust deed will exclude foreign persons for the purposes of surcharge foreign person duty and land tax in all Australian jurisdictions for which these surcharges apply, and, incorporate additional clauses to irrevocably exclude foreign persons and prevent inadvertent foreign person surcharge duty and land tax liabilities of the trust in NSW.
Revenue NSW requires that, where any named beneficiary is a foreign person, their name must be deleted from the trust deed as a beneficiary in order to exclude them. This is an additional requirement to the amendments necessary to exclude foreign persons.
As amendments of these types have the effect of changing the beneficiaries, specific duty/tax advice should be obtained prior to execution.
Australian Accounting Standards – AASB 2020-02
The Australian Accounting Standards Board released AASB 2020-02, which has a mandatory adoption date of 1 July, 2021.
The practical implication of AASB 2020-02 for trusts is that they may no longer be able to self-assess financial reporting requirements. If a trust deed which requires the preparation of financial statements that comply with “Australian Accounting Standards” is amended in any way on or after 1 July, 2021, AASB 2020-02 will apply and the trust will then be required to prepare general purpose financial statements.
The Australian Accounting Standards amendment can be ordered to provide the trustee greater flexibility to choose its accounting requirements in this regard.
Lineal Descendants
Lineal Descendants amendments can be ordered to amend a standard discretionary trust deed so that it essentially becomes a lineal descendants discretionary trust. Information on the two types available are below.
In the Acis Lineal Descendants Discretionary Trust – Income and Capital Protected:
  • Income and capital can be distributed to a largely finite group of beneficiaries only – the Primary Beneficiaries, Lineal Descendants of Primary Beneficiaries and companies and trusts in which all of the interests are held only by, or for the benefit of Primary Beneficiaries and their Lineal Descendants.
  • Additional beneficiaries can only be appointed in very limited circumstances and in a very limited way: A brother or sister of a Primary Beneficiary, or a Lineal Descendant of those brothers and sisters, may be appointed as a Secondary Beneficiary, but only where there are no remaining living Lineal Descendants of the Primary Beneficiaries.
  • The power to amend the Trust Deed cannot be used if, as a result any person other than those outlined above, could or will become a beneficiary of the Trust.
In the Acis Lineal Descendants Discretionary Trust – Capital Protected Only:
  • Income can be distributed to a broad range of beneficiaries, essentially the same as in a standard discretionary trust.
  • Capital can be distributed to a largely finite group of beneficiaries only - the Primary Beneficiaries and Lineal Descendants of Primary Beneficiaries.
  • Beneficiaries entitled to income can be removed and appointed in the same way they can in a standard discretionary trust.
  • The limited group of beneficiaries entitled to capital (Capital Beneficiaries) can only be added to in very limited circumstances and in a very limited way: A brother or sister of a Primary Beneficiary, or a Lineal Descendant of those brothers and sisters, may be appointed as a Capital Beneficiary, but only where there are no remaining living Lineal Descendants of the Primary Beneficiaries.
  • The power to amend the Trust Deed cannot be used if, as a result, any person who is not a Primary Beneficiary, a Lineal Descendant of a Primary Beneficiary, a brother or sister of a Primary Beneficiary or a Lineal Descendant of those brothers and sisters, could or will become entitled to receive the capital of the Trust.
Note:
  • Lineal Descendants means Child or remoter issue.
  • Child includes a natural child and adopted child but excludes a step child or foster child.
Acis does not provide advice of any kind in relation to the Corporations Act, company law, trust law, resettlement issues, taxation, duty or other federal, state or territory taxes or in respect of any other matter. Please note that taxation laws, the Corporations Act, trust laws and stamp duty laws in all jurisdictions are continually changing. Significant taxes, fees, duties and penalties can be imposed when altering trust deeds. Accordingly, except to the extent required by law, we do not accept any responsibility. We do not purport to provide advice nor should you construe anything in any documentation or material provided by us or any conversation with us or correspondence as advice of any kind. Specific professional advice should be obtained.