In a joint submission with CPA Australia on 9 December 2021, CA ANZ strongly supported greater alignment between Australia’s taxation and insolvency laws to simplify the external administration of assets and liabilities held in a trust with a corporate trustee.
The joint submission called for:
- an eviction clause in a trust deed, and
- the right of an appointor to appoint a new trustee
to be unenforceable when a corporation that is the trustee enters any form of external administration.
The recommendations seek to recognise that the beneficiaries of a trust are commonly the same, or closely related to, the directors of the corporate trustee. We considered that enabling a registered liquidator to act for all entities a corporation is legally responsible for will achieve the best outcomes for the creditors and owners of the corporation and the beneficiaries of the trust.
The joint submission also called for business registers to indicate when a corporation acts in the capacity of a trustee. We considered awareness of the role of the corporation for a business is a cornerstone of due diligence and should be revealed in the result of a simple search on an entities ACN or ABN.