Discretionary Trust - Variation SA Vesting Day
Deed of Variation to extend the Vesting Day of South Australian Trusts. For use by AMP only.
A South Australian Trust is one that specifically states that the trust is subject to the laws in force from time to time in South Australia. The case law shows that the domicile of the trust is important. So whether that means all or some of the trustees, beneficiaries and assets of the trust are in or based in South Australia remains to be seen.
Issues to consider before amending the Trust Deed
1. does the deed contain a specific power to amend (unlike the deed in Stein v Sybmore Holdings 2006] NSWSC 1004);
2. have you considered the Trust Deed's variation clause in the light of Mercanti v Mercanti [2016] WASCA 206;
3. has the vesting day passed? If so then Taxation Ruling TR 2018/6 is important. It states:
Valid amendment to the trust’s vesting date prior to vesting
10. CGT event E1 does not happen by amending the vesting date through the valid exercise of a power in a trust deed or on approval of a relevant court.
The ruling also states:
However once the vesting date has passed, the trust has vested and it is no longer possible for a trustee to change the vesting date. Specifically, once the trust has vested, the interests in the trust property become fixed at law. This result cannot be avoided by the parties continuing to carry on as though the trust had not vested or by
a purported exercise by the trustee of a power to vary the deed.
Further, neither a mistaken assumption that discretionary powers of appointment continue to apply after a trust’s vesting date, nor ignorance of the vesting date having occurred, can alter the legal and equitable rights of parties that are established by the terms of the trust on vesting