DEED OF VARIATION UNIT TRUST

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At a Glance

A deed of variation of unit trust can be used to amend a Unit Trust deed.

This precedent is a guide only and should not be adopted for use without consideration of the particular circumstances and the provisions of the particular clauses of the trust deed.

A deed of variation of trust may attract stamp duty and trigger other tax consequences. Commentary is included with links to relevant State (New South Wales) and Federal (ATO) stamp duty and tax rulings.

The provisions of the variation of trust clause in the unit trust deed should be examined to ensure that the trustee has the power to amend the unit trust deed. If this power is subject to conditions, the conditions should be complied with and the recitals amended to recite that the conditions have been satisfied. If there is no express power of variation, a de facto variation (for example to insert a power to vary the terms of the trust deed) may be achieved by a deed signed by the parties to the original trust deed (assuming there has been no change of trustee) in which the current unit holders consent to the variation.

 

 

Please note the Stamp Duty is calculated for NSW only and you will need to incorporate your corresponding ruling for your state.

 

Why You Need a Deed of Variation of Unit Trust

A Deed of Variation is necessary when adjustments need to be made to a Unit Trust’s governing document due to changes in structure, regulatory requirements, or unit holders’ agreements. Without a properly executed Deed of Variation, modifications may be deemed invalid, potentially leading to legal disputes.

With our professionally drafted Deed of Variation template, you can:

  • Legally amend the terms of an existing Unit Trust

  • Ensure compliance with Australian trust and tax laws

  • Modify unit holder rights and obligations as needed

  • Protect the interests of all parties involved in the trust

  • Reduce the risk of legal challenges and disputes

INCLUDES

A Deed of Variation of a Unit Trust is a legal instrument used to amend the terms of an existing unit trust deed. Such variations may be necessary to update provisions, accommodate changes in legislation, or reflect the evolving intentions of the trustee and unit holders.

Key Considerations for a Deed of Variation:

  1. Authority to Amend: Before executing a variation, it’s essential to review the original trust deed to confirm that it permits amendments and to understand any specified procedures or limitations.
  2. Scope of Variation: Common amendments include changes to the trust’s name, appointment or removal of trustees, modification of unit holder rights, or updates to administrative procedures. It’s crucial to ensure that the proposed changes are within the powers granted by the original deed.
  3. Consent Requirements: Depending on the trust deed’s provisions, certain variations may require the consent of all unit holders or specific parties, such as the appointor or guardian. Ensuring proper consent is obtained is vital for the validity of the variation.
  4. Tax and Duty Implications: Altering a trust deed can have tax consequences and may attract stamp duty, especially if the variation results in a resettlement or changes the beneficial ownership of trust assets. It’s advisable to consult with tax professionals and relevant authorities to understand these implications.
    revenue.nsw.gov.au
  1. Documentation and Record-Keeping: Once executed, the Deed of Variation becomes part of the trust’s legal documentation. It’s important to maintain accurate records of all such deeds to ensure clarity in the trust’s administration and for reference in future transactions.

For those seeking professionally drafted templates for a Deed of Variation of a Unit Trust, resources such as Precedents Online offer comprehensive and customisable documents suitable for various trust structures.

By carefully executing a Deed of Variation, trustees and unit holders can ensure that the unit trust remains aligned with current objectives and complies with prevailing legal requirements.

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