Setting up a trust in Australia involves choosing the right trust structure, preparing a trust deed, and meeting ongoing tax and reporting obligations with the Australian Taxation Office and ASIC. Costs and complexity vary depending on the trust type, so speaking with a qualified Australian solicitor or accountant before proceeding is strongly recommended.
How to set up a trust in Australia: costs and process – 2026 AU guide
Trusts are a common structure used by Australian families, investors, and business owners to hold assets, manage distributions, and plan for the future. Whether you are exploring a discretionary family trust, a unit trust, or a bare trust, understanding the setup process can help you ask better questions and make more informed decisions when working with a legal or financial professional.
This guide walks through the key stages of establishing a trust in Australia, explains what is involved at each step, and points you toward authoritative resources so you can do your research with confidence.
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What is a trust and why do Australians use them?
A trust is a legal arrangement in which one party, called the trustee, holds and manages assets on behalf of one or more beneficiaries. The trustee has a legal duty to act in the best interests of those beneficiaries in accordance with the terms set out in the trust deed.
Australians commonly use trusts for a range of purposes, including asset protection, estate planning, and structuring investments or business activities. Trusts can also provide flexibility in how income is distributed among family members, though any arrangement must be structured in compliance with Australian tax law. The Australian Taxation Office provides detailed guidance on how trusts are treated for income tax, capital gains tax, and GST purposes.
It is important to note that trusts are not a one-size-fits-all solution, and the suitability of any particular structure depends entirely on your individual circumstances. A registered tax agent or solicitor can advise you on whether a trust is appropriate for your situation.
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Common types of trusts in Australia
Before setting up a trust, you need to identify which structure suits your needs. The most commonly used trust types in Australia include:
- Discretionary (family) trusts -- the trustee has discretion over how income and capital are distributed among beneficiaries. These are widely used in family and small business contexts. - Unit trusts -- beneficiaries hold units that represent fixed entitlements to income and capital, similar in some respects to shares in a company. These are often used by investors or business partners. - Bare trusts -- a simple arrangement where the trustee holds assets for a named beneficiary who has absolute entitlement. - Testamentary trusts -- created through a will and taking effect upon death, often used in estate planning. - Special disability trusts -- established to support a family member with a severe disability, with specific concessions available under Australian law.
The business.gov.au website provides an accessible overview of business structures, including trusts, which can help you compare your options before engaging a professional.
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The step-by-step process for setting up a trust
Setting up a trust in Australia generally follows these key stages:
1. Define your purpose and structure Identify what the trust is for, who the trustee and beneficiaries will be, and which type of trust is most appropriate. This stage typically involves consultation with a solicitor and an accountant. 2. Choose a trustee The trustee can be an individual or a company (a corporate trustee). Using a company as trustee is common because it can offer certain liability protections and is generally easier to manage over time. If you use a corporate trustee, you will need to register a company with ASIC. You can explore best company registration services in Sydney to compare providers who can assist with this step. 3. Draft and execute the trust deed The trust deed is the foundational document. It must be prepared by a qualified solicitor and should set out the trustee's powers, the identity of the beneficiaries (or classes of beneficiaries), distribution rules, and provisions for amending or winding up the trust. The deed must be signed and, depending on your state or territory, may need to be stamped by the relevant revenue authority. 4. Pay any applicable stamp duty Stamp duty on trust deeds varies by state and territory. Each jurisdiction has its own rates and rules administered by the relevant state revenue office. Check with the revenue authority in your state before proceeding. 5. Apply for a Tax File Number and ABN Once the trust deed is executed, you will generally need to apply for a Tax File Number (TFN) for the trust through the Australian Taxation Office. If the trust will carry on an enterprise, you may also need to apply for an Australian Business Number (ABN) through the Australian Business Register. 6. Open a trust bank account Trusts should maintain separate financial records and a dedicated bank account in the name of the trustee "as trustee for" the trust. 7. Meet ongoing obligations Trusts have ongoing compliance requirements including annual tax returns, record keeping, and, where a corporate trustee is involved, ASIC obligations. Refer to ASIC for corporate trustee compliance and the ATO for trust tax obligations.---
Understanding the costs involved
The costs of setting up a trust in Australia vary depending on the trust type, the complexity of the deed, whether a corporate trustee is used, and the professional fees in your state.
As a general guide, costs typically fall into the following categories:
- Legal fees for drafting the trust deed (varies widely by solicitor and complexity) - Company registration costs if a corporate trustee is needed (see our cost guide for more detail) - Stamp duty on the trust deed (varies by state and territory) - ATO registration for a TFN or ABN (no charge, but takes time) - Ongoing accounting and tax fees for annual returns and compliance
Because professional fees and government charges change over time and differ significantly by location and trust type, we recommend obtaining quotes from at least two qualified professionals rather than relying on any single estimate.
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Corporate trustees: what you need to know
Using a company as trustee is a popular approach in Australia, particularly for discretionary family trusts. A corporate trustee means the company holds assets in its capacity as trustee, which can help protect against personal liability in some circumstances.
Setting up a corporate trustee requires registering a company under the Corporations Act 2001, which is administered by ASIC. The company will have its own obligations, including annual reviews and fees payable to ASIC. Once the company is registered, it must be appointed as trustee in the trust deed.
When comparing company registration providers, review our methodology to understand how we evaluate services for accuracy, transparency, and value.
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Ongoing compliance and tax obligations
Trusts are not a set-and-forget arrangement. Once established, a trust must:
- Lodge an annual trust tax return with the ATO - Keep accurate financial records - Ensure the trustee makes valid resolutions before the end of each income year (particularly for discretionary trusts) so that income is properly distributed - Comply with any ASIC obligations if a corporate trustee is involved
The Australian Taxation Office publishes detailed guidance on trust tax returns, trustee obligations, and how trust income is assessed. Reviewing this guidance or engaging a registered tax agent annually is strongly advisable.
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FAQ
Q: Can I set up a trust without a solicitor? A: Legally, there is no absolute requirement to use a solicitor, but given the complexity and long-term consequences of a trust deed, most experts strongly recommend engaging a qualified professional. Errors in the deed can be expensive to rectify and may have significant tax consequences. Q: How long does it take to set up a trust in Australia? A: Timeframes vary depending on the complexity of the trust, how quickly professionals can prepare and execute the deed, and how long state revenue authorities take to process stamping. Allow several weeks as a minimum. Q: Does a trust need an ABN? A: If the trust is carrying on an enterprise, it will generally need an ABN. You can apply through the Australian Business Register. Speak with your accountant to confirm whether your trust qualifies. Q: Are trusts taxed in Australia? A: Yes. Trusts are subject to Australian income tax rules. Broadly, trust income that is distributed to beneficiaries is taxed in the hands of those beneficiaries, while undistributed income may be taxed at the highest marginal rate. The Australian Taxation Office provides detailed guidance on trust taxation, and a registered tax agent can help you navigate your obligations.---
Sources
- ASIC -- Australian Securities and Investments Commission - Australian Taxation Office -- Trusts - business.gov.au -- Business structures - Corporations Act 2001 -- Federal Register of Legislation - Australian Business Register
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Information in this article is general only and not legal or tax advice. Verify the details with the linked sources or an appropriately qualified Australian professional before relying on them.
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