A trust settlor is the party responsible for establishing a trust. It can be established by an individual or an entity. If you want to know who the trust settlor is, you can find it on the trust deed.
What is a trust settlor?
Trust settlor applications
The information you need to provide on your client's application for the trust settlor depends on whether the settlor is an individual or entity and also whether the settlor is a foreign tax resident. Please see various scenarios below:
If the settlor is an Indivudal and not a foreign tax resident:
- Settlor's name
- Settlor's residential address.
If the settlor is an Individual and is a foreign tax resident:
- Settlor's name
- Settlor's residential address
- DOB
- Each country the settlor is a tax resident of
- TIN and/or TIN exemption reason.
If the settlor is a company/trust and not a foreign tax resident:
- Settlor's name
- Settlor's ABN (trust) / ACN (company)
- Settlor's business address
- Trust type
- Each country the settlor is a tax resident of
- TIN and/or TIN exemption reason.
If the settlor isn’t a foreign tax resident:
Where the settlor isn't a foreign tax resident, the following information is required:
- Settlor's name;
- Settlor's residential address.
Date of birth will only be required where the trust settlor is a foreign tax resident and a natural person.
Providing information for tax residency
In November 2018, the ATO published updated Common Reporting Standard (CRS)/Foreign Account Tax Compliance Act (FATCA) guidelines requiring mandatory collection of tax information from settlors of trust accounts as an additional requirement where the trust is determined to be a Passive Non-Financial Entity.
To ensure we can comply with these guidelines and continue to meet our regulatory obligations, providing tax residency details for a trust settlor is a mandatory requirement on all Macquarie application forms, even when the settlor contributed less than $10,000 to the trust.
Settlors of trusts are always included in the definition of Controlling Person for CRS purposes and therefore must provide trust settlor identification.
For more information, please refer to section 4.11 of the ATO guidance:
‘Australian AML/KYC procedures do not require identification of settlors in all cases. If the identified Controlling Persons do not include the settlor (which may be the case under Australian AML/KYC procedures where the settlor contributed less than $10,000), an RFI will be required to go beyond information collected for AML/KYC purposes and seek the identity of the settlor.’
If the settlor is deceased, and to the best of your knowledge the settlor wasn’t a foreign tax resident, OR if the settlor has no connection to the trust (other than the original settlement that created the trust), and to the best of your knowledge the settlor isn’t a foreign tax resident, then select ‘No’ to the question Is the individual a tax resident of a country other than Australia? on the application form.
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