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Corporate Trustee for a Discressionary Trust

Discussion in 'Accounting & Tax' started by MelbourneStephen, 14th Aug, 2015.

  1. MelbourneStephen

    MelbourneStephen Member

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    I am a trustee and beneficiary of an existing discretionary trust.
    Am I able to add a Corporate Trustee to the Trust, if so how?
     
  2. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Well from a legal perspective you wont ADD a Corporate Trustee since I have yet to see a Trust Deed that permits humans and a Corporate Trustee to both be trustees but hey your deed may well say that. If not, it could be a problem.

    The first step is to understand the terms of the trust deed and how a Trustee may be replaced and / or appointed. ie Not as additional but as a replacements. Typically the appointor will appoint the trustee on the termination of the existing trustee/s. It may require a deed or may just require a resolution...By ??? It may require approval / consents etc.

    You realise that the ownership of all bank accounts, investments and land must be changed. ATO notified etc.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    The trustee may be changed, subject to the terms of the deed or by court order. Read the deed to see who has the power to change the trustee and how.
     
  4. MelbourneStephen

    MelbourneStephen Member

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    Thanks Paul and Terry, interesting points you both make.

    In your experience does action of changing a trustee from an Individual Trustee to a Corporate Trustee trigger any kind of Capital Gains Tax event?
     
  5. RPI

    RPI Property Lawyer, Town Planner Business Member

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    Deed of Retirement and Appointment of Trustee.
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Changing trustees of a trust doens't itself result in a CGT event, but it could result in stamp duty in some states depending on the terms of the deed. It also results in a pain in the arse as title deeds need to be changed and mortgages discharged and new loans entered into.