North Sydney Commercial Lawyers

Changing the Control of a Family TrustPrint This Post

Changing the Control of a Family Trust

Estate Planning Update – Autumn 2013

While the method of taxation of family and other non-superannuation trusts is still to be resolved for future income years, there have been major positive developments in relation to changes being made to the control and administration of a family trust.

After a 13 year period where the ATO took a much wider view that State and Territory revenue offices of what might trigger a resettlement of a trust and thus a CGT event, the ATO has changed its stance. It has accepted that a change to the control or administration of a trust that does not create a fixed entitlement for a beneficiary is unlikely of itself to trigger a CGT event. The change in the ATO’s view is consistent with recent Court decisions. An ATO determination has provided 3 examples of where a change of control is unlikely to trigger a CGT event.

This restores the person holding the power to appoint a trustee to the status of a valuable and often crucial estate planning mechanism, given that family trusts so often cannot be controlled via a Will.