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Last amended: 27 May 2011
Failure to comply
If a special disability trust (SDT) fails to comply with a requirement, the Commission may issue a waiver notice that maintains the trust's concessional status for a short time while the non-compliance is rectified.
Circumstances when a waiver notice cannot be given
A waiver cannot be given where the purpose requirements are not met because of fraudulent behaviour. In addition for all trusts, regardless of when they were established, a waiver notice cannot be given if any of the following provisions of a SDT are not met:
- the beneficiary requirements,
- the trustee requirements,
- the trust property requirements,
- the preparation of financial statements, and
- the audit requirements.
When a waiver notice may be given
A waiver notice may be given if the non-compliance relates to:
- contravention of a requirement relating to the trust purpose, trust deed, or reporting, for a trust created before 1 January 2011, where the trust deed cannot be varied;
- contravention of a requirement relating to the trust purpose, or reporting for all other trusts;
- contravention of a reporting requirement not caused by the trustees;
contravention of a requirement relating to the purpose of the trust, where total expenditure in a financial year is no more than $5,000. Consideration must also be given to the nature of the breach and the number of times a similar event has occurred.
If there is a delay in providing the financial statements of the trust and the delay is not due to the actions of the trustee, a waiver notice can be given for a period of up to three months from 31 March of the relevant year. This can be extended if the circumstances warrant it for an additional three month period, up to a maximum of twelve months.
The waiver notice must be in writing and contain:
- the start and end date of the period of the waiver,
- the matter to which the waiver applies, e.g. the lodgement of the trust's financial statements by 31 March, and
- the conditions, if any, that the trustee must comply with, e.g. the trustee must provide the trust's financial statements.