Deed of variation of unit trust not joining unit holders

Deed of variation of unit trust not joining unit holders

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This precedent is a template deed of variation of unit trust not joining unit holders.

A unit trust, where there are no joining unit holders, can be amended in writing, signed and approved by the trustee.

If the unit holders are able to be joined in, use precedent “Deed of variation of unit trust joining unit holders”. It is desirable that the unit holders are joined in to avoid any concern that the rights of the unit holders have been affected without their consent. Unless the trust deed gives the trustee a power of variation without unit holder consent, the unit holders should be parties.

A deed of variation of trust may attract ad valorem rates of stamp duty. Inquiries should be made in this regard prior to execution of the deed especially where beneficiaries (including default beneficiaries) or a class of beneficiaries are inserted or removed from the trust deed or where the variation could amount to a resettlement. See Australian Stamp Duties Law, LexisNexis Butterworths, Australia, 2002, looseleaf, Vol 1 at [23.0120], where the authors discuss the stamp duty position regarding a variation of trust in each state and territory, eg in New South Wales see Revenue Ruling DUT 017.

A deed of variation of trust may attract adverse tax consequences. See the approach of the Australian Taxation Office (ATO) to variations of trust set out in the ATO's published article "Creation of a new trust - Statement of Principles August 2001" which refers to the High Court decision in Commissioner of Taxation v Commercial Nominees of Australia Ltd (2001) 179 ALR 655; 47 ATR 220; [2001] HCA 33; BC200102753.

For a template trust deed, see the precedent “Trust deed”.

This precedent has been authored for Lexis Nexis by Selwyn L Black Peter D Carroll, Carroll & O’Dea and updated by Jane Garber-Rosenzweig, Gable Lawyers.

This precedent is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.