Information for trustees

The Department of Justice and Attorney-General is the supervising entity for the Trust Accounts Act 1973 (the Act) and Trust Accounts Regulation 1999, which prescribe mandatory requirements for the operation of trust accounts.

Setting up a Trust Account (Including Establishment of Trust Bank Account).

1. Prior to establishing a trust bank account, public accountants must advise the supervising entity in writing of their intention to do so. Refer to section 5 (4) of the Act.
2. Upon establishment of the aforementioned trust bank account, the public accountant must notify the supervising entity within 14 days that they have become a trustee under the Act, by lodging Form 1 - New trust account Notification Under Section 5 (1) and 5 (1A) of the Trust Accounts Act 1973. Refer to section 5 (1) and 5 (1A) of the Act.
3. The trustee must appoint an auditor to the trust account and advise the supervising entity in writing within 30 days of such appointment. Refer to section 14 (1) and 14 (2) of the Act.
4. A Checklist for establishing a trust account has been provided to assist trustees.

Changes to a Trust Account

The trustee must advise the supervising entity within 14 days if any material changes are made to a trust account, such as a new trust account name, address, or a new trustee.

1. A trustee may notify changes to the supervising entity in writing or by using Form 2 - Maintenance of particulars Notification Under Section 5 (2) of the Trust Accounts Act 1973.
2. Where a trustee ceases to be a trustee to a trust account, that person must advise the supervising entity, either in writing or by using Form 3 - Ceased to be a trustee Notification Under Section 5 (3) of the Trust Accounts Act 1973.

Operating a Trust Account

The applicable financial period for trust accounts is 1 April to 31 March each year. At the end of the financial period, trustees must provide the following:

1. A statement, witnessed by a Justice of the Peace, declaring the largest amount of money held in the trust account during the previous financial period. The statement can be submitted in writing or by using a Form 4A / Form 4B proforma. The statement is due no later than 14 April each year. Refer to section 31 (1) of the Act.
   • Form 4A Proforma is for trust accounts that are exempt from having to provide financial security under a Ministerial Exemption gazetted in 2002.
   • Form 4B Proforma is used for all other trust accounts.
2. A financial security, based on that contained in the section 31 (1) statement. If the trust account is exempt under the order exempting trustee, a financial security is not required. For all other instances, security must be provided to the value of $10,000, or one third of the amount stated in the section 31(1) statement, whichever is less. Financial security is due to be lodged by 14 April each year. Refer to section 31 (2) and 31 (3) of the Act.
3. An independent auditor’s report that must address a specific 25 point schedule. The audit report is due on 31 May each year. Refer to Section 16 (1) of the Act.

Trustees who do not comply with any of the above sections of the Act may be prosecuted. Other breaches of the Act and Trust Accounts Regulation 1999 are dealt with on a case by case basis.

Closing a Trust Account

When a trust account is closed, the trustee must:

1. Immediately advise the supervising entity that the trust account has been closed.
   Refer to section 5 (6) of the Act.
2. Arrange for an audit of the trust account from the commencement of the current financial period up until the date of closure.
3. Ensure the final audit report is lodged with the supervising entity within two months of the date that the trust account was closed. Refer to section 19 (1) of the Act.

Once the supervising entity has received the above information, and any outstanding matters have been resolved, security held against a trust account will be returned to the trustee or financial institution.