How healthy is your deed?
Written on the 9 March 2012 by Australianbiz
Back in 2010, the High Court of Australia handed down the long-awaited decision in Commissioner of Taxation v Bamford; Bamford v Commissioner of Taxation (Bamford).
Vesting day of the trust
Default beneficiaries of the trust
The day by which trust distribution resolutions must be made
The definition and meaning of trust income
(i.e. what will be taken to be ‘income of the trust estate’, however described)
Powers to alter the meaning of the trust income
(e.g. by determining what receipts are capital or income)
Powers to amend the deed
Prior year losses
Other issues to look for:
All trust deeds should be reviewed before 30 June each year to ensure they allow sufficient flexibility in determining trust income, consistent with the approach in Bamford and legislative changes introduced following that decision.
Specialist advice may be required to confirm whether any amendments are necessary.
We do not expect that it will be necessary to update every deed, but we do recommend that every trust deed be reviewed before the trust minutes for the 2011/2012 income year are prepared and implemented.
For further assistance or enquiries please contact the team at Macmillans Waller Fry - Accountants.
This information is provided as a guide only and is not intended to constitute advice whether legal or professional. You should obtain appropriate advice concerning your particular circumstances.