Miscellaneous 2005

A Matter of Trusts: Discretionary trusts and the power to distribute capital

Source: Taxation In Australia Journal Article

Published Date: 1 Dec 2005

The discretionary trust has traditionally been a source of asset protection for families, in part through restrictive provisions regarding capital distributions. Many older trust deeds either prohibit capital distributions or require that capital distributions only be made by written instrument with the consent of the guardian, supervisor or appointor. This mechanism prevents trustees from making distributions of capital without consultation. In recent times, this aspect of asset protection has been diluted, due mainly to the call for greater flexibility in the operation of trusts. Many trust deeds now provide the trustee with an unfettered discretion to distribute the capital of the trust. It may be that the push for greater flexibility has gone too far, bringing the protection of the assets of the trust into doubt.
Author Profile
Anita Aarons

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


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.


Miscellaneous 2005

Share this page