Part 1 – What’s that? My distribution is invalid?

Source: South Australia

Published Date: 9 Mar 2023


We have seen the validity of actions taken by trustees in administering trusts – particularly in the succession context – increasingly challenged by beneficiaries.

This has often come to light with disputes about the validity of amendments to trust deeds and the identity of the appointor. But what are the flow-on consequences of these and other actions against the trustee in relation to distributions of trust income? How is this addressed when the invalidity may only be discovered some considerable time after the event?

This presentation blends some technical trust and tax law content with consideration of practical workshop style questions to address these issues. Part one of this presentation considers:

  • Background to the context of trust distributions
  • What are the obvious and not so obvious reasons why a trust distribution may be invalid?
  • Recent cases on trust formalities; and
  • Taxation of distributions where there is an invalid appointment.

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