Other Trust Matters pre 01/01/2002

Trusts - constructive, resulting, secret or implied

A court may decide that a trust exists due to the conduct of the relevant parties, although no action has been taken to declare a trust in writing.

Example: These trusts include:

• constructive trusts,

• resulting trusts,

• secret trusts, and

• implied trusts.

Assessment of constructive, resulting, secret or implied trusts

If one of these trusts exists, determine the role of the person in the trust and assess the trust income and assets according to that role. The following table outlines the 2 roles that a person may play in these trusts and how to assess them.

Ownership of assets held in trust for others

Any asset held in trust by a person for any other person or child, cannot be regarded as the person's asset. Assets held in trust for children are not treated differently to assets held for any other person. Ownership of the asset belongs to the beneficial owner, not the trustee.

Bank account in trust - assessment of income and assets

A person can establish a trust by opening a bank account as trustee for another person. For example a bank account could be opened on behalf of a child or any other person. The following table describes assessment of bank accounts held in trust.

The person is legally obliged in the same way as other trustees to use the trust's assets for the benefit of the beneficiary(s).

Person loans assets to a trust

A person who loans assets to a trust retains ownership of the assets, which are assessed in the same way as other amounts on loan. The loan will be reflected as a liability in the trust's balance sheet.

Gifting of assets to a trust

Disposal of assets may have occurred if a person gifts assets to a trust within 5 years of becoming qualified to receive a pension. The disposal may be subject to deeming.