Published on 03 Jul 13
by WESTERN AUSTRALIAN DIVISION, THE TAX INSTITUTE
The first part of this paper provides an insight into the legal issues that arise when a trust vests. Key aspects covered include:
- the intricate operation of trust deeds on vesting, determining where proceeds on vesting should be distributed (including consideration of distributions in-specie and options when charitable groups are named as beneficiaries) and other key legal aspects;
- options for extending the life of a trust, changing the terms of the deed and managing resettlement risks;
- options for early vesting of trusts where the trust is no longer wanted.
The second section considers key stamp duty and income tax aspects arising on the vesting of trusts, including the vesting of trusts by way of distribution of assets in-specie to beneficiaries. The paper considers trust resettlement “war stories” between tax payers and the revenue authorities from reported court cases as well as the serious tax issues which can often arise on the vesting of foreign trusts and distribution of trust proceeds to Australian taxpayers and potential work arounds. Key aspects covered include:
- key stamp duty issues arising on vesting
- key income tax issues arising on vesting
- defending a trust resettlement determination made by the ATO or SRO
- Australian tax issues arising on the vesting of offshore trusts with Australian beneficiaries.
Robert is a Barrister in Western Australia. Current at 03 July 2013
John Fickling CTA
John W Fickling, CTA, is a barrister at the Western Australian Bar, specialising in taxation law and taxation law matters also involving contractual, corporations, constitutional and administrative law issues. John appears in matters both for and against the Australian Taxation Office and Office of State Revenue, provides taxation law advice, drafts correspondence and submissions and negotiates settlements for and against the revenue authorities. John has practised in taxation law for 14 years, four of which were spent in London providing time-sensitive and commercially driven taxation advice to US and European global investment banks on cross-border acquisitions, financing, restructures and capital raisings. John holds a Master of Laws with first class honours, in corporate and international taxation law and has presented at seminars on cross-border tax structuring in Australia, London and NY. Current at 16 June 2014
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