This session examines the ATO’s approach to trust splitting and resettlement. While the Commissioner’s outcomes in recent private rulings may be defensible, the reasoning is, in my view, wrongly framed. We will analyse the ATO’s position against the background of Clark, Commercial Nominees, and long-standing principles of trust law. Attendees should read TD 2019/14 and the following three PBRs in advance:
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PBR 1051902419908 (2021) – A children’s trust with three corporate trustees holding “parts” of the trust assets. Despite functional separation, ATO held there was no resettlement as obligations remained consolidated.
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PBR 1052281722478 (2024) – A unit trust with a new trustee appointed over part of the assets. Complex appointor/trustee structure. ATO again found no resettlement, drawing on TD 2019/14 factors.
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PBR 1052226151719 (2024) – A discretionary trust varied into a unit trust. ATO found no CGT event E1–E8, relying on Clark and TD 2012/21, provided continuity of property/membership remained.
Discussion Focus
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Whether the ATO has correctly identified the trigger for resettlement.
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The relevance of Clark, Commercial Nominees, and DKLR to trust variations and resettlements.
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Whether the ATO’s application of TD 2019/14 extends beyond its proper scope.
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Practical implications for structuring family succession and trust control without triggering CGT events.
This session will test the ATO’s reasoning on trust splitting and resettlement against fundamental trust principles.
Please see below link to case materials which is assumed reading in order to participate in the discussion:
Conversion of discretionary trust to unit trust
Discussion led by Adrian Cartland