Trusts 2018

Co-trustees, splitting, cloning: What to do with your trust

Source: Taxation In Australia Journal Article

Published Date: 1 Mar 2018


Trust splitting is an arrangement where parties to an existing trust functionally split the operation of the trust so that co-trustees own and control the trust assets in a manner in which each trustee owns and controls discrete trust assets (and the income from those assets), to the exclusion of all other trustees but on behalf of the same range of beneficiaries. While advisers have utilised trust splitting arrangements to assist their clients in estate and succession planning, the ATO's renewed interest in trust splitting arrangements is a reminder to advisers of the need to take stock of the history of these arrangements to better respond to what will hopefully be positive ATO draft guidance. This article highlights the importance of understanding the distinction between trust splitting, cloning and the appointment of a co-trustee, even though many often use these terms interchangeably. Given that these types of restructures continue to raise many complex income tax, duty and interpersonal considerations, this article explores why these arrangements continue to be pursued by advisers.

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Trusts 2018

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