How to exclude foreign beneficiaries for an existing Discretionary Trust

This deed of variation to exclude foreign beneficiaries is intended to ensure the Trust will not be a ‘foreign person’ or ‘foreign purchaser’ for the purposes of foreign acquirer duty (in Queensland, NSW, South Australia and Victoria) and land tax surcharges (in Queensland and NSW).

Important: Each jurisdiction imposes separate requirements and the deed of variation does not address the following issues, which should be considered on a case by case basis (with specialist advice sought where appropriate): 


  1. a) the NSW provisions include a requirement that any named beneficiaries who are foreign residents are expressly removed as named beneficiaries. While the deed of variation removes foreign residents as a class, it does not expressly remove any named beneficiaries; 

  2. b) the Queensland provisions require that any non-resident default beneficiaries are excluded from the Trust. The removal of default beneficiaries is a dutiable transaction in Queensland and the deed of variation should not be used unless the duty consequences have been first confirmed; and 

  3. c) in Queensland, the Stamps Office retains the ability to both exempt a trust otherwise caught by the rules, and reassess a trust which had otherwise not been previously caught (within certain timeframes).

Important: It is critical that you consider the original trust deed, as well as each subsequent deed and instrument varying the terms of the trust, when determining whether to use this document.

To start this process, you will need to click on ‘Deed of Variation (Exclude Foreign Beneficiaries)’ under the 'Trust Rules & Vesting' heading.

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You will then be redirected to the relevant webform, to which the form will be pre-filled with the relevant data that has currently been added or imported into the trust profile of the trust. You will need to complete any data that has not been pre-filled. These data fields will be highlighted in pink. You cannot submit the webform until all relevant data fields have been completed.

Important: In relation to the ‘Variation Details’ webform, the following details will need to be completed:

  • Date of establishment – This will be pre-filled if entered or input previously into the Trust Profile.
  • 'Add date of variation' question. If you answer yes, you will need to enter the prior variation dates inclusive of the date of the most current Deed of Variation. If you answer no, no additional fields are required on this question.

    • If there are variation dates available for Trust, these dates will be listed on the tab as variation dates and can be removed by click on 'Remove' button available against each variation date.
  • Variation clause - clause in the current trust deed that regulates a variation of the Trust;
  • How many clauses are in the current deed? - number of clauses in the current trust deed.

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When you come to the ‘consenting party’ webform, you will be asked the following question:

'Is anyone required to consent to the variation of the trust deed by the Trustee?' The answer to this question will be located in the current trust deed of the trust.

If the answer is ‘Yes’ to this question, a dropdown box will appear that will list the following options:

    • Principal
    • Appointor
    • Guardian
    • Other - once selected, an additional 'Description of Consenting Party in the Deed' will appear so as to input the details manually.

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After submitting the details, the relevant documentation will appear on the ‘collaboration page’ i.e.:

  • Discretionary Trust Variation Ancillaries
  • Discretionary Trust Variation
  • Information Flyer
  • Legal Review Certificate

 

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