Trust accounts Brisbane
Role of the Trustee on Accountant Trust Accounts Brisbane
An account in trust, or a trust account, is any financial account opened by an individual but managed by a designated trustee for the benefit of a third party. Some examples of a trust account are a college trust, real estate, tax payments, and a child trust for minors.
The role of a public accountant in regards to Trust Accounts is governed by the Trust Accounts Act 1973 and the Trust Accounts Regulation 1999, which defines a public accountant’s role as trustee as one who manages client funds to comply with trust account legislation.
Requirements of a trustee are:
- To meet the prescribed requirements of the Trust Accounts Act of 1973, and the Trust Accounts Regulation of 1999.
- Provide an annual report to the Queensland entity overseeing trust accounts such as the Department of Justice and Attorney General.
- Provide additional information requested by the entity overseeing trust accounts.
Initial steps to set up a trust account Brisbane
Setting up Trust Accounts in Brisbane is simple, though does include several steps to enable a smooth process.
- Advise your accountant that you intend on creating a trust account, including the name and branch of your financial institution where your Brisbane trust account will be set up.
- If requiring approval, we will contact your financial institution, in writing, granting permission to open a Trust Account in Brisbane.
- Within 14 days of creating a trust account you must complete and submit Form 1 – New trust account. This single-page form designates you as a trustee under the Trust Account Act of 1973 in Queensland.
- Review the Form 1A – New trust account checklist to ensure that you have successfully completed each step to create a trust account in Brisbane.
Appoint an Approved Auditor Within 30 days
Once you have completed the initial set up steps you will need to
- Appoint an auditor for the trust account within 30 days
- Advise us (supervising entity) the auditor’s full name, business address, and endorsement of their appointment.
What do I do if my Trust Account Requires Changes?
Due to the length that many trust accounts remain active it is expected that Brisbane Trust Accounts will require changes such as name, address, and even the trustee. In such cases you will need to advise us within 30 days of such changes.
To notify us of any changes in your Brisbane Trust Account fill out Form 2 – Maintenance of particulars.
Additionally, if the trustee of an account resigns, fill out and submit to us Form 3 – Cease to be a trustee.
Annual Reporting on a Trust Account Brisbane
Queensland has compulsory reporting requirements which need to be met annually, with a reporting period for a trust as 1 April to 31 March.
At the end of the financial period you must provide the following information:
- Statement of highest amount held in trust: Written statement witnessed by the Justice of the Peace, stating the largest amount of money in the trust account for the previous financial period. This must be lodged by 14 April.
- Financial security (unless exempted): A financial security must be annually lodged by 14 April. This amount is based on the reporting in your maximum cashbook declaration. Security is $10,000 or a third of your declaration amount (lesser of the two). If you are exempt from lodging a financial security fill out Form 4A – Section 31.1 Proforma to state the highest amount held in trust.
- Independent auditor’s report: It is the trustee’s responsibility to have completed and submit an Independent Auditor’s Report annually at the end of each financial period. The Independent Auditor’s Report is a 25-pt. list of prescribed information which can be found on Form 5 – Prescribed Information for Audit Reportalso referring to section 23(1) of the Regulation.
- The Independent Auditor’s Report must be on the auditor’s business letterhead and submitted to us by post or email. It is the responsibility of the trustee to ensure the audit report has been completed and submitted to us by 31 May.
Conditions of Exemption
- The nature of the business relates solely to income tax returns.
- Tax refunds are paid out at the end of each working day to affect a cashbook balance of zero.
Refer to Queensland Government Gazette No 21, 24 May 2002 for additional information.
Closing a Trust Account Brisbane, Queensland
When closing out a trust account the trustee must:
- Submit a Form 6 – Closure of trust account, or advise of closure on business letterhead
- Arrange an independent audit of the trust account from the start of the current financial year until the day it was closed
- Lodge the final audit report within 2 months of closing the trust account.
Upon completion of trust closure requirements along with resolution of outstanding issues, any trust account security we hold will be returned to the issuing financial institution.