What did you mean by a “bare trustee”?

Re. your question – it is a long family story. But keep it short: the sole intention of establishing the trust many many years ago was to protect the family asset (not much of it, but a lot to us at the time – which was just 1 investment property (IP) and some shares/cash). The trust deed was originally in MY name as the trustee. Many years after the trust was set up, I didn’t want my Mother to worry about losing family assets if I were seeing someone, so I changed the trust deed to have me removed as trustee and have my Mother appointed as trustee. However, the IP which on the title was in my name ATF for the trust was still kept the same. The trust was after all the real owner of the IP irrespective of the change in trustee. With that thought, I didn’t attend to the change of title then.

Hence, the title of the IP is still in my name, the original trustee. However, the deed of variation reflects Mum as the trustee. I now want to change the deed back to me as the trustee and clean the mess (ie: open the correct trust account in my name again, because when the trust sold the trust shares during the time my Mother’s name was the trustee, the proceeds had to be banked into the trust name. But with the trust deed showing Mum as the trustee, a new account trust account (Mum as trustee) was opened, which is still used till this date. I want to close the trust account in my Mum’s name as trustee and open another one in my name as trustee going forward. Seems to be a bit of paper works.

Have I confused you so far? …

Any way, I am planning to sell the IP. The sell will incur CGT on the trust and I am happy to pay CGT then. But I just wanted to check whether by changing the trust to my name as ‘trustee’ now would trigger any CGT? If yes, then I will be hit with a ‘double’ CGT. The only reason I need to change the trustee back to my name is because when the IP is sold, I believe the proceed will be made in a cheque payable to the name on the title, which is my name. But I want the money to go to the trust account and not my personal account, as this is the trust money. Therefore I will need to change the trust deed with my name to be able to open a bank account for the trust with my name as trustee.

So I have another please, if I don’t do anything now, that is don’t bother changing the trust deed, can I instruct the solicitor to make the cheque payable to ‘the trust name’ rather than my name? If the answer is yes, then I really don’t need to worry about changing trust deed and opening new account; i.e.: things just continue on as current.

And another question, please: was the trust supposed to pay stamp duty when I transferred my trustee position to my Mother’s back then?

Thanks.

Thanks, Terry.
What if we just changed the trust deed, but not the name on the title? Must we legally be required to change the name on the title also?
Regards,
Jenny

Thanks, Hydra.
That was what I had been told – "it is a family arrangement and therefore not considered as income".  And this is the reason why I haven't been including it in my tax return.  But this omission is not as important as I don't mind back-paying the tax that I supposedly owed (my family came to Austr empty-handed. The citizens here and the Govt assisted our family a lot when we first arrived and thus I never thought about tax-saving. Paying my due tax is a form of repaying back to Austr). But what really concerns me as mentioned above is the possibility of losing the capital gain exemption on my Mother's home.

I picked up a really good book "Savings Tax on Your Property Investment" written by Noel Whittaker and Julia Hartman, referred by Kenny (a forum member here). The book mentions about losing CGT exemption on the main residence if it earns income from day 1 (I never knew this fact) and it worries me since.
Thanks again. 
Jenny

Hi Scott,

Sounds like something to stay clear off.
Thanks.
Jenny