Trusts 2017

The discretionary beneficiary - Thoughts on defining the beneficiary class

Source: The Tax Specialist Journal Article

Published Date: 1 Jun 2017


Trust deeds were traditionally drafted with a wide telephone book style list of beneficiaries. A wide beneficiary class facilitates income splitting and obviates the need to amend the trust deed to include more beneficiaries in the future. Another key reason why trust deeds contained a wide beneficiary class is the concern that adding a beneficiary may otherwise cause a resettlement of the trust. However, since the Full Federal Court decision of FCT v Clark, the risk of a trust deed variation triggering a resettlement has greatly reduced. Given that trust deed variations are less likely to trigger a resettlement, the author suggests that the traditional wide way of defining the beneficiary class should be modified to capture people and entities who are likely to receive income or capital distributions from the trust, but not the whole telephone book.

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now

Already a Subscriber? Login now


The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.


Trusts 2017

Share this page