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

Published on 01 Mar 18 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

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of the need to take stock of the history of these arrangements to better respond to what will hopefully be positive ATO draft guidance.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.

Author profiles

John Ioannou CTA
John was admitted as a Solicitor in 2002 and is a partner at Deloitte Private. He has experience in the areas of taxation, structuring, trusts and estate, succession and asset protection planning. John has a Bachelor of Arts, Bachelor of Laws and a Masters of Law. He is currently Queensland’s representative on the Institute’s National Professional Development Committee, a member of Queensland’s State Council and elected 2019 State Council Chair. - Current at 25 June 2019
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Dominic Moon ATI
Dominic is a Special Counsel at Deloitte Private with expertise in taxation, estate planning and commercial law. Dominic’s strength is in his ability to research, comprehend and implement complex transactions for his clients with a focus on achieving strong commercial and taxation outcomes. Over the past few years, he has built a substantial following of Accountants and Financial Planners who rely on his technical expertise to service the needs of their clients. While Dominic has worked across many different industries, he has developed specialised knowledge in professional services, pharmacy, transport and extractive industries. - Current at 04 October 2018
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