Private ruling: Trust resettlement
Date of advice: 31 July 2025
Published: 29 September 2025
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Will the proposed amendments to the trust deed result in a trust resettlement and cause either CGT event E1 or CGT event E2 to happen in accordance with section 104-55 or 104-60 of the Income Tax Assessment Act 1997 ? | A1: No.

Relevant facts and circumstances: The Trust (the Trust) was established by deed of settlement (Trust Deed) made on DDMM20YY. The schedule to and forming part of the Trust Deed (the Schedule) contains details of the key terms of the Trust. The Trust is a discretionary trust and it carries on investment activities. The vesting date of the Trust is 80 years from the date the Trust Deed was executed. Individual A is currently the sole director and secretary of the corporate Trustee, holds the position of Appointor of the Trust and is a Primary Beneficiary of the Trust. The Trustee has received advice that for the ease of administration of the process for transfer of control upon the death of any of the Primary Beneficiaries of the Trust is to establish a company to take on the role of Appointor of the Trust. There has been no variations or amendments performed on the Trust Deed from the commencement of the Trust. The Trust Deed and Schedule indicates that Individual A has held the position of Appointor of the Trust since the Trust was established. Clause XX of the Trust Deed provides the provisions that deal with the addition, and the retirement of Appointors. The clause in the Trust Deed dealing with Appointors of the Trust provides that an existing Appointer may, by Will or deed inter vivos or other written instrument, appoint an Appointor in addition to or in substitution as an Appointor to the Trust. Individual A is the sole director, secretary and shareholder of Company B that will be made the Appointor of the Trust. The company has been dormant since it was incorporated. The Individual A and the Trustee have prepared a Deed of Variation of Trust Deed, which, when executed will: a) remove Individual A as Appointor of the Trust b) appoint Company B as the new Appointor of the Trust, and c) amend the Schedule to the Trust Deed to reflect the change in the identity of the Appointor. The proposed amendments will be carried out by exercise of the Trustee's power of variation under Clause XX of the Trust Deed. They will made by executing the Deed of Variation. The variation clause of the Trust Deed provides that the Trustee, in its sole and absolute discretion may revoke, add to, amend, replace or vary the Trust Deed. Accordingly, the Trustee has the express power to amend the Trust Deed as specified in the Deed of Variation and the proposed amendments do not enliven any restrictions or limitations on the Trustee's power of amendment given under the Trust Deed. The proposed amendments will not lead to any asset or assets of the Trust being subject to a separate charter of rights and obligations such as to give rise to the conclusion that the asset or assets have been settled on terms of a different trust. The proposed amendments to the Trust Deed are valid and effective in accordance with the law in enforced in jurisdiction governing the Trust.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 104-55 | Income Tax Assessment Act 1997 Section 104-60