Recent changes to Queensland trust law allows for trusts to vest up to 125 years after the commencement date of the trust, including a discretionary trust, testamentary trust and unit trust.
The extended vesting date should be reflected in new trust deeds while a variation to extend the vesting date of an existing trust deed must be carefully managed. Other than South Australia (where trusts may continue indefinitely), Queensland now becomes the only other state with a statutory perpetuity period of greater than 80 years.
Background
The relevant provisions concerning changes to the vesting dates of discretionary trusts in Queensland commence from 1 August 2025. This change was introduced by the Property Law Act 2023 (Qld) (Act) which received Royal Assent on 2 November 2023. This Act replaced the Property Law Act 1974 (Qld).
New perpetuity period
From 1 August 2025, the common law rule against perpetuities is abolished in Queensland under the Act. Broadly, this rule required that an interest in a trust must vest within 21 years of the death of a person that was alive at the time the interest was created (often referred to as a life in being plus 21 years provision).
Instead, a perpetuity period of 125 years or a shorter term as stated or implied by the trust will apply for the disposition of property under a trust established on or after 1 August 2025. This means, for example, that new discretionary trusts established on or after 1 August 2025 are permitted to vest up to 125 years after the trust commences.
Variation of vesting date
Under the Act, the trustee of a trust may opt in to the new 125-year perpetuity period to effectively extend the vesting date of the trust provided the trust deed has an appropriate variation power. The Act also provides further mechanisms for beneficiaries and interested parties to extend the vesting date of a trust that will broadly require an application to the court.
Why extend the vesting date of a trust?
The vesting of a trust can give rise to considerable taxation consequences and transaction costs, including in relation to capital gains tax (‘CGT’ – see TR 2018/6 for the Commissioner of Taxation’s views about the immediate income tax consequences of a trust vesting). Accordingly, an extended vesting date defers the CGT and related tax impact that occurs as a consequence of vesting and allows for greater succession planning.
Increasing the longevity of a trust also means that the benefits of a trust, such as asset protection, income splitting and family succession planning can continue for a far greater period.
A longer vesting date may also impact the viability of trusts as an alternative investment vehicle to SMSFs in the context of the proposed division 296 tax on SMSF member balances of over $3 million; especially as trusts will be an alternative structure to super funds that are currently not proposed to be taxed on unrealised gains.
There are also some potential disadvantages to extending the vesting date of a trust, however a trust can typically be vested earlier than its specified vesting date subject to the terms of the trust deed. Naturally, varying a trust deed may carry a risk of what is loosely referred to as a ‘resettlement’ of a trust, particularly in the absence of a sufficiently broad variation power. Therefore, appropriate planning is required to manage any potential Federal and state/territory tax, duty and other risks associated with varying a trust deed.
Can you extend the vesting date of an SMSF?
Self managed superannuation funds (SMSFs) are a type of trust and numerous older SMSF deeds expressly include a vesting date. However, s 343 of the Superannuation Industry (Supervision) Act 1993 (Cth) provides that the rules of law relating to perpetuities do not apply to superannuation funds (which includes SMSFs). This section applies regardless of when the SMSF was established. Broadly, this means that SMSFs can last indefinitely.
Nevertheless, if you do have an SMSF deed with a vesting date, we recommend that the deed is updated.
Naturally, DBA Lawyers’ SMSF deed and governing rules do not include an express vesting date.
Trust review service
Before proceeding with varying a trust deed to extend a vesting date, we recommend that one of our lawyers review the trust deed and provide advice on the trust deed and the risks involved and whether the deed should be updated to bring the deed up to date with other provisions due to ongoing changes and developments in trust, tax and related law.
Our trust review service involves us reviewing the trust deed to ensure there are appropriate and up to date provisions for income streaming, appointor powers, investment powers, financial reporting requirements and the vesting date. We report back our feedback on possible amendments and let you decide what changes you would like to make.
Further information on our range of discretionary trust services (including extending the vesting date of an existing discretionary trust) can be found here.
DBA Lawyers’ vesting date documentation
DBA Lawyers offers a suite of documentation to extend the vesting date of discretionary trusts that are governed by Queensland law. This suite of documents includes:
- Covering letter
- Trustee resolutions
- Deed of variation to extend the vesting date of a discretionary trust
Our fees to prepare the above suite of documents is $990 including GST for a trust with a DBA Lawyer’s discretionary trust deed and $1,250 including GST for non-DBA Lawyer’s discretionary trust deeds.
New discretionary trusts ordered from DBA Lawyers from 1 August 2025 also provide for a vesting date of 125-years after commencement for discretionary trusts governed by Queensland law.
We would also be pleased to advise on extending the vesting date for other trusts, such as unit, hybrid and testamentary trusts, governed by Queensland law.
More information on our discretionary trust can be found here.
Conclusions
Trustees and beneficiaries of trusts governed by Queensland law should be made aware of the ability to increase the lifespan of their trusts under the new provisions of the Act. Variations to trust deeds do however involve risks and these should be carefully considered and a competent tax and trusts lawyer should be involved. We do recommend that a lawyer be requested to review and provide feedback on each deed before varying the vesting date to ensure there are no surprises; especially no unexpected tax or other liabilities.
We look forward to being of assistance.
Related articles
- Why you should order discretionary trusts from DBA Lawyers
- Does your trust deed have appropriate income characterisation and streaming powers?
- Discretionary trusts – variations and issues
- ATO guidance on managing trust distributions
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By Daniel Butler, Director ([email protected]) and Shaun Backhaus, Director ([email protected]) and Fraser Stead, Lawyer, ([email protected]).
Note: DBA Lawyers presents regular SMSF Online Updates. For more details or to register, visit www.dbanetwork.com.au or call 03 9092 9400.
For more information regarding how DBA Lawyers can assist in your SMSF practice, visit
This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.
21 July 2025
