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ARTICLE · 06 NOVEMBER 2008

ATO Accepts That Extending Trust Vesting Date Does Not Trigger A Resettlement

Cooper Grace Ward
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In 2001 the ATO issued a Statement of Principles in relation to trust resettlements but have steadfastly refused to formalise this into a public ruling.

AustraliaTax
Greg Cahill
Greg Cahill
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In 2001 the ATO issued a Statement of Principles in relation to trust resettlements but have steadfastly refused to formalise this into a public ruling.

It is widely accepted that many of the positions taken by the ATO in the Statement of Principles are not correct.

However, the fact that it is still in circulation and commonly relied upon by the ATO creates significant uncertainty for clients and advisors when considering amendments to trust deeds.

The consequences of inadvertently triggering a trust resettlement can be significant, as the effect of a resettlement is that the initial trust comes to an end and a new trust is created. This will trigger CGT events, and a deemed disposal of trading stock, depreciable plant etc.

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