In this two-part article, we explore two recent cases that provide guidance on when a declaration of trust will be a dutiable transaction.
Circumstances can arise where a trustee decides to execute a document that merely confirms or acknowledges an existing trust relationship. This could occur where such documentation was not prepared contemporaneously to the creation of the trust and documentary evidence of the trust relationship is required for commercial or litigious reasons, or for the purpose of confirming the existence of the trust for tax or duty laws or to other parties (like banks or revenue authorities).
However, a confirmation, declaration or acknowledgment of trust can potentially trigger tax or duty consequences. Therefore, any such confirmation, declaration or acknowledgment must be made with care to ensure that tax or duty consequences are not triggered. In this two-part article, we will consider two recent land transfer (stamp) duty cases involving the potential duty consequences of executing confirmatory declarations of trust.
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