What is a trust vesting date?
The vesting date is the date that the trust will end, which is usually stated in the trust deed. You can’t change the vesting date of a trust after that date has passed.
Can I change the vesting date?
In all states other than South Australia, your trust must vest after 80 years. Usually the vesting date can be extended prior to it being reached without significant consequences, but there are certain rules to this.
- It can’t be extended to a date more than 80 years from the date the trust commenced.
- The trust deed must give the trustee power to extend the vesting date (must ensure the terms of the trust deed are complied with in event you change vesting date.
- Vesting date may be essential feature of a trust, in which case varying it should be carefully considered in case doing so will give rise to ‘resettlement’ issues.
If you have passed the vesting date, the trust has already vested, and therefore you cannot extend the trust. If you want to extend the vesting date to 80 years, you will also need a Deed of Variation or a Court order.
If the trust deed does not contain a power to extend the vesting date, it does not mean all is lost. In most states, the Supreme Court has the power to vary trusts under their legislation.
Why does the vesting date matter?
The vesting of a trust can create CGT and income tax obligations. It is best to seek professional advice to determine whether the vesting of your trust will have CGT or income tax consequences.
The beneficiaries become entitled to the property of a trust on the vesting of that trust. The powers of the trustee change when the trust vests.
More information? To find out more, give us a call on 1300 023 782 or email firstname.lastname@example.org.
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