Following on from the recent posts
about the ATO draft determination on resettlements (TD2012/D4), today's post is
in effect a further reminder of an earlier post that focused on the catch
phrase 'Read the Deed', again with thanks to co View Legal director Tara Lucke.
One of the key themes in the
recent ATO determination is that a trust variation must be made within the
scope of the variation power in the trust deed.
If a purported variation is made
outside the scope of the particular variation power, the ATO has provided
guidance that this may result in the termination of a trust (i.e. a
resettlement for CGT purposes).
We are constantly encountering
deeds that have significant limitations on the variation power, particularly
with the regular amendments we are doing for clients of accounting firms to
ensure that trust deeds are up-to-date for all recent changes in law.
Next week’s post will focus on
some of the common variation prohibitions we come across.
Until next week.
