Discretionary Trust - Deed of Variation

Hi! I’m a long-time lurker and avid reader, but now I’d love some help!

I’m wondering if anyone can give me some rough tips regarding amending a family trust deed. A few months ago I purchased a discretionary trust bundle online using Cleardocs, assuming the Trust Deed would have the clause re: excluding foreign beneficiaries, however I have since realised this was not the case, and it has already been signed, settled, stamped, etc.

The trust owns no assets at this stage, nor is there any financial activity at all, but the purpose is to purchase property (without a foreign resident surcharge and extra land tax, thanks!)

I have an appointment with a solicitor in two weeks to discuss, but in the meantime I’d like to set my mind at rest.

Am I able to have her do a Deed of Variation specifically to add this clause? There’s a lot of info re: amending trust deeds to include this clause prior to December 2020 - I assume it was just a cut-off period for deeds settled prior to that date.

Your advice would be SO greatly appreciated!

 

Yes it is possible. No resettlement worries if its assets don't include anything except cash.

 

Thank you so much for your reply That’s really helpful!

One more thing - In general, are there any restrictions on making ‘foreign resident’ amendments to a trust deed (so long as the deed itself allows for amendments to be made). And, when amendments/variations are made, do they apply from the time of the changes only?

Eg, as an example - if I had already entered into a contract for sale (which I nearly did) and didn’t know re: the excluding foreign residents clause, at what stage of the process would I have been able to vary the deed before the surcharge/extra land tax was deemed payable? Exchange? Stamping? Settlement? How would Revenue NSW have viewed this? I find this part of things quite confusing…

 

That is something you need legal advice on - from a solicitor, not an accountant.
It would generally be from the settlement I would think, without checking, but it will depend on the location of the land.

 

That makes sense Terry. Thank you for your helpful reply.

 

A DOV is gnereally unable to "backdate" and is certainly a matter for specific legal advice. The key taxing event for duty and then land tax surcharge is likely the issue of relevance. The deed + DOV may need submission at or prior to the duties assessment. If the original deed has been settled it may even be a option to resettle the trust with a revised deed that replaces the former deed rather than as an amendment. Its like two trusts with the same name were formed and when the old one ceases to hold that cash its effectively no longer a trust. However extra duty could be payable if duty on the former deed has already been assessed.

Who advised on the form of the trust deed for that to have occurred ?????? The people I rely on suggested the above replacement option be given legal opinion. Tony Anamourlis at TGA Law Melbourne is a proficient practitioner in the areas of duties and deeds.