Resettlement

Resettlement occurs when a trust comes to an end and the assets of the trust are transferred to another trustee to be held on different trusts.

Resettlement is often authorised by the trust deed but can have serious revenue consequences including:

• • capital gains tax because there has been a disposal of the assets of the trust;
• • income tax because of the deemed disposal of trading stock, if the trustee is running a business; and
• • stamp duty because there has been a change in ownership of dutiable property.

Sometimes a resettlement can be unintended and can arise from a variation in the trust deed including:

• • the addition or removal of beneficiaries; and
• • changing the terms of the trust.

See Resettlement.