Last week, an accountant and I caught up in relation to his review of trust distributions in previous years for a new client to his firm.
The main issue related to income that had been passed to a company over a number of years.
While the trust deed allowed distributions to companies, it had a relatively unusual provision that required all of the shares in that company to be owned by the 'primary beneficiaries' set out in the schedule.
Unfortunately the company that had been used had a share structure that did not comply with the provisions of the deed and we were trying to explore if there were some potential solutions available.
Each idea we have come up with to date has not been particularly satisfactory, so this week’s practical tip is simply to remember to ensure that whenever working with trust someone is made responsible to 'read the deed’.
Until next week.
Matthew Burgess
