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A trustee is the legal entity that holds the assets of a trustTrustees have significant power as they have the authority to distribute trust income, sometimes at their own discretion.

Throughout the life of the trust, there may be circumstances which require you to change the trustee controlling the trust. This article sets out the tax implications that may arise as a result of changing trustees.

Does a Change of Trustee Trigger CGT Issues?

A change of trustee involves the transfer of legal title. However, as long as it is done within the scope described in the trust deed, it should not trigger capital gains tax (CGT) consequences. This is because the relevant taxpayer for the trust asset is the office of the trustee, regardless of the identity of the particular trustee from time to time. 

Does a Change of Trustee Trigger Duty Issues?

Trustees have legal ownership over the trust assets. Changing the trustee will therefore require a transfer of ownership over the trust assets from the old to the new trustee.

A transfer transaction may trigger duty tax if the trust holds dutiable property at the time of the change. Dutiable property broadly includes:

  • land;
  • real estate;
  • shares in a company;
  • business assets; and
  • partnership interests.

In New South Wales (NSW) and the Australia Capital Territory (ACT), stamp duty is generally payable on a transfer of ownership for trusts which:

  • people establish in those states; or
  • hold dutiable property in those states.

In all other states, an exemption is generally available when the duty arises as a result of a change in trustees. This means there should not be any duty payable when changing trustees.


There are some exemptions or concessions from this tax available in each state or territory. The particular rules and requirements differ from one jurisdiction to the next. But generally, you must meet the following requirements to qualify for an exemption:

  • you must enter into the trust for the sole purpose of changing the trustee of a trust;
  • the transaction must not change the rights or interests of the trust beneficiaries, or terminate the trust; and
  • you must have paid any previous transfer duties on all trust acquisitions.

Note that, in NSW, there are limits on exemptions to ensure that continuing trustees cannot be a beneficiary if a new trustee has been appointed (where there are multiple trustees for a trust). Limits may also apply if the transfer is part of a scheme that detrimentally affects the interest of any parties to the trust.

If you do not meet the exemption eligibility requirements, you may have to pay stamp duty when changing trustees.

Resettlement of Trusts

Regardless of which state your trust is based in, make sure you first look at the trust deed before changing trustees. You need to make sure that:

  • the current deed allows for a change of trustees to take place; and
  • you follow the requirements and procedures stated in the deed to execute the change.

If the change is considered significant enough that it affects the ‘foundation’ of the trust, it may give rise to a resettlement of the trust. A resettlement effectively means that the relevant changes are so fundamental that the old trust is taken to have ended and a new trust has arisen. This gives rise to both CGT and duty consequences.

LegalVision cannot provide legal assistance with this topic. We recommend you contact your local law society.


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