Changes to Beneficiaries Still Causing Headaches

Since the advent of Tax Determination (TD) 2012/21 back in 2012, people have been able to make changes to their trust deeds without triggering a CGT resettlement, provided that the change is authorised by the trust deed variation clause. This has lead to a number of clients approaching us to change the beneficiaries in their trusts.

Generally, making a change to the beneficiaries of a trust falls within the scope of the trust variation clause and therefore does not give rise to a CGT resettlement. However, it is still worth considering whether a change in beneficiaries causes a stamp duty problem.

Where the trust in question holds property in Victoria, the changing of the beneficiaries of the trust is likely to give rise to a stamp duty resettlement. This means that due to a change in the beneficial ownership of the property, the trust becomes liable to pay stamp duty at market rates on any property held by the trust.

This could be an expensive endeavour for your clients. If you have changes you wish to make to a trust, speak with Castle today (03 9898 6666) to ascertain whether there are any nasty surprises lurking for your clients.