Unit Trust Vesting deed – how to wind up a unit trust
Unit Trust Vesting deed for Centrelink?
You have finally retired and applied to Centrelink for a pension. Unfortunately, Centrelink takes issue with the fact that you have an old unit trust that was created 30 years ago. It hasn’t been used for years. There is no money left in it. The unit trust has a nil value. It has no assets and no debts. What can you do? To formally wind up a unit trust build this Unit Trust Vesting deed on our law firm’s website.
Vesting a Family Trust you don’t want?
You have an old Unit Trust. Your accountant or financial planner suggests that it is more trouble than it is worth. Vesting a Unit Trust is simple and straightforward. Just build this Vesting a Unit Trust deed to wind up a unit trust.
Why wind up a Unit Trust?
• The Unit Trust has achieved its original purpose
• It has no assets (if it has debts do a Debt Forgiveness Deed first)
• The Unit Holders of the Unit Trust don’t want to continue
• The Unit Trust has reached its vesting date
How does the Unit Trust Vesting deed wind up a Unit Trust?
This is how you wind up a Unit Trust Deed:
1. Distribute any capital that is left to the Unit Holders
2. Build a Debt Forgiveness Deed to forgive loans owed to Unit Holders and related parties
3. Your Accountant prepares any outstanding tax returns
4. Build and sign both the Unit Trust Vesting deed and the minutes
Build this Unit Trust Vesting deed on our law firm website. You get:
1. Vesting a Family Trust deed (just print and sign)
2. Minutes for your Accountant’s due diligence file
3. law firm Letter of Advice on winding up your Unit Trust
ATO’s position – Taxation Ruling TR 2018/6
Taxation Ruling TR 2018/6 sets out the views on the income tax consequences of a trust vesting. Our deed complies with the ruling.
A trust’s ‘vesting” or ‘termination’ date is the day on which the beneficiaries’ interests in the property of the trust become ‘vested in interest and possession’.
Have a look at the Sample document, training videos and hints. They help you as you build the Unit Trust Vesting Deed.
Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
Australia wide law firm
39 Stirling Highway, Nedlands, WA
Mobile: 0477 796 959
Direct: 08 6389 0400
National: 1800 141 612
Why should I wind up a Unit Trust?
- The Unit Trust has achieved its original purpose
- It has no assets
- The Unit Trust has reached its vesting date
What do I need to do to terminate the Unit Trust?
- The capital of the trust must be distributed in accordance with the Unit Trust deed.
- The Trustee must satisfy any existing liabilities of the Unit trust. This includes any existing or future
taxation liabilities that arise as a result of the termination of the trust.
- The Trustee must pass a resolution determining that the trust is to be vested (terminated).
- The final accounts of the trust, including a final tax return, must be prepared.
Once this is done, you can build our Deed of Vesting of a Unit Trust. You build a set of documents to vest and close the Unit Trust.
After building this document on our website you are emailed:
1. Unit Trust – Deed of Variation of Vesting
3. Law firm Letter of advice
What do I need to do to terminate the trust?
- The capital of the trust must be distributed in accordance with the trust deed.
- The Trustee must satisfy any existing liabilities of the trust. This includes any existing or future
taxation liabilities that arise as a result of ending the trust.
- Pass a resolution stating the that the trust is vested (terminated).
- Your Accountant prepares final Unit Trust accounts, including the final tax return.
- Build this document
To wind up a Unit Trust, we need to first identify it. We do this by referring to:
- The Unit Trust name
- Date the Unit Trust Deed, that established the Unit Trust, was signed
Every Unit Trust has a name. Sadly, they are generally quite boring. E.g. Smith Unit Trust, named after Mr Smith.
The Unit Trust name is a ‘nickname’. It is not registered anywhere. It just helps you and your accountant identify your Unit Trust.
Take out your Deed of Trust that first started your Unit Trust. Have a look at the front cover. It often has the name of your Unit Trust. It repeats in the body of the Deed as well. Check any subsequent Deeds of Variation, to make sure that your Unit Trust didn’t change its name.
Be careful to not confuse the Unit Trust name with your Trustee. Your Trustee (e.g. XYZ Pty Ltd) is not your trust name.
Because you are building your Unit Trust Vesting deed on our law firm’s website you:
1. retain legal professional privilege
2. law firm PI insurance protects you
3. receive legal advice
4. by law have us act in your best interests, over our own
Only a law firm provides the above.
‘Resettlement’ happens when you alter the Trust to such a level that it becomes a new trust. You would then suffer Capital Gains Tax, Stamp Duty and other issues.
As a taxation law firm we ensure that you do not suffer a ‘resettlement’ by applying:
1. Clark’s case
2. High Court decision in FC of T v Commercial Nominees  HCA 33
3. ATO’s withdrawal in 2012 of its Statement of Principles on the Creation of a New Trust. And its release of the ATO’s Decision Impact Statement