http://www.cleardocs.com/clearlaw/trusts/index.html ClearLaw articles Director-changes-can-trigger-landholder-duty-in-Victoria <p><em>If you own or advise on property held through companies or unit trusts, a recent Victorian Supreme Court decision highlights a significant duty exposure. <a href="#_ftn1" name="_ftnref1">[1]</a> The Victorian Supreme Court has confirmed that simply changing the director or shareholder of a corporate trustee for a landholding unit trust can trigger landholder duty under section 82 of the Duties Act<a href="#_ftn2" name="_ftnref2">[2]</a> – even when the trust’s unitholdings remain unchanged.</em></p> <p><em>This is the first time section 82 has been interpreted at this level. The Court backed the SRO’s use of section 82 to impose landholder duty, making clear that it stands alone as a separate way of charging duty, not just an anti-avoidance measure.</em></p> <p><em>For business clients and accountants, this means that seemingly routine administrative updates, such as director or shareholder changes in trustee companies, could attract landholder duty in Victoria. </em></p> <p><em>In short, if you manage trusts or advise clients in this space, it’s crucial to assess the landholder duty risk whenever making changes to corporate trustee structures – no matter how minor those changes may seem.  </em></p> Tue, 24 Mar 2026 04:24:19 GMT Jack Leeds, Maddocks Lawyers 1201 Trust-Issues-Learning-to-Read-the-Green-Red-and-beige-Flags <p>Recent decisions from Australian courts have provided valuable guidance on key aspects of trust law, clarifying the scope of trustee powers, the limits of judicial intervention, and the evidentiary challenges that arise in trust administration. These cases underscore the importance of precise drafting, proactive governance, and diligent record-keeping in managing trusts effectively.</p> <p>This article examines four judgments that address:</p> <ul> <li>the extent to which trustees can amend trust deeds to alter control structures;</li> <li>the Court’s power to approve variations that benefit future beneficiaries despite express prohibitions;</li> <li>the evidentiary burden involved in reconstructing lost trust deeds; and</li> <li>the high threshold for judicial intervention in trust disputes, particularly in fixed unit trusts.</li> </ul> <p>Together, these cases highlight that even routine administrative decisions can have significant legal and tax consequences. They reinforce the need for trustees and advisors to carefully review trust instruments, anticipate succession and governance challenges, and seek professional advice when navigating amendments or disputes.</p> Mon, 29 Sep 2025 01:37:27 GMT Ben Pertich, Maddocks Lawyers 1070 Discretionary-Trust-Deeds-for-Family-Trusts-Arent-they-all-the-same <p>Family trusts play a vital role in managing wealth and succession planning, yet the importance of the trust deed, and ensuring that it operates effectively, is sometimes overlooked.  While sometimes regarded as uniform in nature, in reality, not all family trust deeds are identical and the differences between trust deeds can have significant legal and financial consequences. </p> <p>Accordingly, it is imperative to have a deed that fulfils the objectives of the trust, that trustees (and their advisors) can easily understand, and one that promotes clarity of their rights and obligations.</p> <p>This article highlights some important features of Cleardocs’ products relating to the establishment, and variation, of family trust deeds which:</p> <ul> <li>advisors can easily understand when making trust distributions, reducing the confusion that often contributes to invalid distributions;</li> <li>are suitable for the objectives and relevant circumstances of the trust, including in respect of excluding certain classes of beneficiaries, such as: <ul> <li>Non-blood relatives (using the Direct Lineal Relatives product); and</li> <li>Foreign persons (using the Family Trust Product, Deed of Variation or Direct Lineal Relatives product); and</li> </ul> </li> <li>use plain English and clear language, are up to date with current laws, regularly reviewed for compliance (as is the case with Cleardocs deeds).</li> </ul> Fri, 29 Aug 2025 01:25:17 GMT Jack Leeds, Maddocks Lawyers 1002 Managed-Investment-Trusts-Restructures-to-Access-the-MIT-Withholding-Regime <p>The Government announced on 13 March 2025 that it will amend tax laws to ensure only genuine investors can access concessional managed invest trust (<strong>MIT</strong>) tax rates. In response, a recent taxpayer alert (<strong>Alert</strong>)<a href="#_ftn1" name="_ftnref1">[1]</a> from the Australian Taxation Office was released highlighting concerns over certain inward investment restructures that inappropriately seek to access the concessional tax benefits of the MIT withholding regime<strong>.</strong>  </p> <p>MITs are important as they make Australian investment products more attractive to global investors, provide tax certainty and efficiency for both fund managers and investors, and are a key part of Australia’s strategy to grow its funds management industry. The Government’s proposed reform will amend the income tax laws to ensure legitimate investors can continue to access concessional withholding tax rates in Australia while strengthening guidelines to prevent misuse.</p> <p>You can read the full ATO alert <a href="https://www.ato.gov.au/law/view/document?docid=TPA/TA20251/NAT/ATO/00001">here</a> and the Treasury announcement <a href="https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/clarifying-tax-arrangements-managed-investment-trusts">here.</a> <p></p> Mon, 28 Jul 2025 01:35:41 GMT Lucy MacLachlan, Maddocks Lawyers 938 Do-Unitholders-Have-Fiduciary-Duties-to-One-Another-The-Court-Says-No <p><em>The Victorian Supreme Court recently addressed a significant issue in the case of Re Lingamaneni Momentum Melbourne Unit Trust [2025] VSC 40.<a href="#_ftn1" name="_ftnref1">[1]</a> The central question was whether unitholders in a unit trust owe fiduciary duties to one another. The Court concluded that they do not.</em></p> <p><em>The case involved a dispute where two unitholders accused another of mismanaging the trust and ending it unfairly. The Court found that the trust deed did not create fiduciary duties among unitholders.</em> <p><em>This decision highlights the importance for unitholders to carefully review their trust deeds and understand the commercial agreements they enter into.</em></p> Mon, 30 Jun 2025 00:21:10 GMT Connor Hehir, Maddocks Lawyers 903 Bend-it-like-Bendel <p><strong>Bend it like Bendel: How should trustees navigate the ATO’s interim decision impact statement?</strong></p> <p><em>On 19 February 2025, the Full Federal Court handed down its greatly anticipated decision in Commissioner of Taxation v Bendel<a href="#_ftn1" name="_ftnref1"><strong>[1]</strong></a> which considered whether unpaid present entitlements (<strong>UPEs</strong>) were ‘loans’ for the purposes of Division 7A.<a href="#_ftn2" name="_ftnref2"><strong>[2]</strong></a> The Court held that a UPE owed to a corporate beneficiary of a discretionary trust is not to be construed as a ‘loan’ for the purposes of Division 7A, overturning more than a decade of ATO practice.</em></p> <p><em>While the decision was a win for taxpayers, on 18 March 2025 the Commissioner applied to the High Court for special leave seeking to appeal the decision. On the following day, the Commissioner issued his interim decision impact statement (<strong>DIS</strong>) clarifying that while he will delay making determinations on issues regarding whether a UPE is a ‘loan’ under Division 7A until the judicial process has been finalised, if a decision is required to be made he will continue to apply his current practice which may still result in a UPE being treated as a loan for Division 7A purposes.<a href="#_ftn3" name="_ftnref3"><strong>[3]</strong></a></em></p> <p><em>Given these developments, as the end of the 2024-25 financial year approaches there is significant uncertainty regarding the income tax treatment of UPEs. This article will briefly outline the Bendel decision and what it means for trust structures, as well as how to navigate the DIS and account for UPEs in the interim before the judicial process is finalised. This article will also outline other measures the Commissioner has at his disposal which is important to be aware of, such as section 100A and the general anti-avoidance rules in Part IVA.<br /><br /></em></p> Thu, 29 May 2025 05:52:02 GMT Tristram Feder 870 What-is-the-appropriate-governing-law-jurisdiction-for-my-Trust-Deed <p>It is commonplace in nearly all trust deeds for there to be a clause which identifies the relevant State or Territory laws which apply to the trust, and the Courts which have jurisdiction (be it exclusive or non-exclusive) to hear a dispute or make orders on the administration of the trust. Accordingly, when establishing a new trust, due consideration should be given to the choice of jurisdiction and the governing law which applies under the trust deed.</p> <p>There is no clear-cut answer as to which State or Territory’s laws should apply to a particular trust. However, the Courts have provided helpful commentary on the relevant factors which need to be taken into account when making the decision. This choice needs to be considered carefully, as Courts hold the power to overrule the choice of governing law provided in a trust deed and nominate a more appropriate jurisdiction’s laws instead, which may have adverse consequences for the trust. </p> <p>This article will revisit a common issue which arises when establishing a trust and will provide a summary of the key commentary provided by the Courts which helps answer the question: what State or Territory’s laws should apply to a particular trust? Further, this article highlights the importance of ensuring this decision is made with due thought and not with ulterior motives (such as seeking favourable duty or tax outcomes) and provides an overview of circumstances in which a trust’s governing law can be changed. </p> Wed, 20 Nov 2024 01:10:58 GMT Joshua Green, Maddocks Lawyers 706 Be-careful-when-varying-a-trust-deed-for-a-trust-that-holds-property <p><em>Earlier this year, the NSW Civil and Administrative Tribunal (<strong>Tribunal</strong>) applied the ‘change in beneficial ownership’ provisions contained in the Duties Act <a href="#_ftn1" name="_ftnref1">[1]</a> for the first time, determining that these provisions can, in certain circumstances, apply to trust property following a variation of the trust. Specifically, the case confirmed that varying a trust deed for a trust which holds ‘dutiable property’ can attract the imposition of ‘ad valorem’ transfer duty under the Duties Act where the variation has altered the nature of the beneficiaries’ interests.</em></p> <p><em>The ruling in Baxter v Chief Commissioner of State Revenue <a href="#_ftn2" name="_ftnref2">[2]</a> confirmed that the variation of the relevant trust deed, which resulted in one beneficiary becoming presently entitled to all income and capital of the trust, constituted a ‘change in equitable interests’ and accordingly, a change in beneficial ownership of the trust property (which included two properties). Duty was therefore imposed on the ‘transfer’ of the two properties to the now sole beneficiary of the trust.</em></p> <p><em>This article outlines the facts established by the court that could result in duty being applied, and the relevant considerations which trustees will need to be aware of in light of the findings of the Tribunal.</em></p> Tue, 01 Oct 2024 01:10:26 GMT Cooper Smith, Maddocks Lawyers 702 Modernisation-of-trust-Administration-comes-into-effect-new-reporting-requirements-for-trusts-and-beneficiaries <p>Amendments to reporting requirements for trusts, including SMSFs that are beneficiaries of trusts, came into effect on 1 July 2024. These income tax reporting changes are being implemented by the ATO under the ‘Modernisation of Trust Administration System’ (MTAS).</p> <p>The new requirements include modifications to the labels in the ‘statement of distribution’ contained in trust tax returns, introducing a ‘trust income schedule’ that all trusts which are beneficiaries and receive trust income will need to lodge with their return, and new data validations processes for lodgements (which are designed to strengthen the integrity of data reported through the lodgement process).</p> <p>This article provides an overview of the MTAS regime, the key changes trustees and beneficiaries will need to be aware of, as well as commenting on any particular implications for SMSFs.</p> Thu, 01 Aug 2024 02:27:50 GMT Lucy MacLachlan, Maddocks Lawyers 698 Revisiting-the-benefits-of-the-Bucket-Company-structure <p>Discretionary trusts are commonplace in family investment structures due to the various benefits they provide. These benefits include tax planning and savings, legal asset protection and flexibility for trustees as to the distribution of income and capital of the trust.</p> <p>In the lead-up to the end of each financial year, trustees are required to determine how the income of its discretionary trust will be distributed, effectively determining who will receive (and pay tax on) the trust's income for that year. Making distributions to a corporate beneficiary, otherwise known as a 'Bucket Company', is an effective strategy that can be implemented as a means to maximise tax saving benefits by ensuring that the amount of tax paid on the balance of the discretionary trust's income, being the income that is not distributed to the other (preferred) beneficiaries due to tax considerations, aligns with the company tax rate of 30%.</p> <p>This article will provide an overview of how Bucket Company structures operate as well as providing guidance for trustees who wish to implement their own Bucket Company structure.</p> Wed, 12 Jun 2024 05:41:51 GMT Sam McKenzie, Maddocks Lawyers 692