How do I terminate a trust?

The termination or more colloquially, winding up of a trust, is far simpler than the deregistration of a company. Nonetheless certain requirements must be met for the termination to occur.

A trust will cease to exist when:

  • It has been wound up according to the trust deed
  • Once it has reached the vesting date stipulated or the end of the perpetuity period (80 years)
  • There ceases to be trust property
  • All beneficiaries of legal age resolve to vest the trust in accordance with the rule in Saunders v Vautier

It is important that you take the following points into account:

  • That you are following processes outlined in the trust deed
  • That you have received consents from any necessary parties to the trust, i.e appointor/s
  • You have advertised for those with a claim to trust property. In some cases a beneficiary's location may be unknown to a trustee, therefore the trustee needs to advertise to allow beneficiaries to present themselves.
  • Identify beneficiaries and distribute all trust property
  • Are there creditors? 
  • Capital Gains Tax and Stamp Duty may apply upon termination
  • Cancellation of trust bank accounts

This information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.

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