By Ciara Broccardo, Paralegal, Stuart O’Neill, Special Counsel, Troy Palmer, Partner and Craig Gibson, Partner

Queensland has taken a major step forward in modernising its trust law, with the recent commencement of the Property Law Act 2023 (Qld).

The new legislation allows trusts governed by Queensland law to operate for up to 125 years from 1 August 2025, an increase from the previous 80-year limit. This reform abolishes the common law rule against perpetuities and aligns Queensland with modern trust jurisdictions such as the United Kingdom, offering new opportunities for long-term tax planning and intergenerational wealth management.

“[The common law rule against perpetuities] is legally complex to apply in practice, can give rise to anomalies and has been modified by statute”

-Explanatory Notes, Property Law Bill 2023

Historically, all Australian states, except South Australia, have applied a statutory perpetuity period of 80 years, requiring trusts to vest and terminate within that timeframe. While the 80-year period may have appeared sufficient at establishment, many trusts are now approaching vesting, which can result in significant tax and duty consequences, especially where trusts hold capital gains tax (CGT) assets, dutiable property, or carry forward tax losses. Upon vesting, trust assets must be distributed in accordance with the deed, often triggering CGT, incurring stamp duty, and extinguishing any remaining tax losses, disrupting carefully considered tax and estate strategies. A perpetuity period of 125 years reflects a contemporary life expectancy and avoids uncertainty in trust duration.

Beyond the 80-Year Rule: What Has Changed?

Under the new legislation, the common law rule against perpetuities, which required future interests in property to vest within 21 years of the death of a relevant life in being, has been abolished. In its place, Queensland now adopts a fixed perpetuity period of 125 years. This reform not only applies to new trusts created after commencement, but also allows existing trusts to opt in where their deed permits or where approved by court order.

The Property Law Act 2023 (Qld) also modernises the “wait and see” rule and clarifies judicial powers to extend perpetuity periods for existing trusts. Section 210 now confirms that a disposition is not invalid merely because it may vest outside the perpetuity period, provided there remains a possibility of vesting within it. In addition, the court’s power to validate property dispositions (formerly in section 211) has been broadened, allowing applications to extend vesting for older trusts in appropriate circumstances. Section 218 is also clarified to ensure the rule does not apply to options or rights of pre-emption, resolving a key source of uncertainty for property-holding trusts.

What You Need to Know

1. Scope: This reform applies to both new and existing Queensland-governed trusts, including discretionary, unit, hybrid, bare, and testamentary trusts.
2. Trust Deed Power: To take advantage of the 125-year period, a trust deed must:
   • Expressly empower the trustee to vary the vesting date;
   • Be varied by all adult beneficiaries (rare for broad discretionary trusts); or
   • Be amended through Supreme Court approval.
3. Timing: Any variation must be made before the current vesting date.

Why Jurisdictional Connection Still Matters

A simple nomination of Queensland law in the trust deed will not automatically ensure that Queensland’s perpetuity period applies. Courts will look beyond the chosen law to determine the trust’s closest and most substantial connection, based on factors such as:

• The location of trust assets;
• Where the trustee resides or carries on business; and
• Where the trust is administered or managed.

If, for example, a trust is established in New South Wales with all assets and administration based there, electing Queensland law solely to access the 125-year period may not be upheld by a court. Careful structuring and evidence of a genuine connection to Queensland are essential.

Electing to adopt Queensland as the governing jurisdiction of a trust can also bring potentially undesirable stamp duty issues, with the scope trust dealings which constitute dutiable transactions arguably wider than any other State.

Key Risks for Clients 

1. Tax and Duty Implications

Vesting may trigger capital gains tax, stamp duty, or loss of tax attributes. Extending a vesting date without proper power or court approval may amount to a resettlement, resulting in immediate tax consequences.

2. Succession and Beneficiary Rights

An extended trust lifespan may affect succession planning, especially where appointor roles, guardian powers, or distribution entitlements are tied to shorter timeframes.

3. Record-Keeping and Governance

Trustees must meet rising governance standards: maintain proper records, document trustee decisions, review vesting provisions regularly, and update deeds in line with the new regime

Next Steps

To consider and, if beneficial, take full advantage of Queensland’s new 125-year perpetuity period:

• Review your trust deeds to determine whether they permit extension or require amendment.
• Seek legal and tax advice well before the current vesting date to avoid rushed decisions or adverse consequences.
• Align succession plans, ensuring appointor and trustee roles remain effective across an extended term.
• Strengthen governance and compliance, especially where trusts hold appreciating or income-generating assets.

This reform offers a valuable opportunity for long-term structuring, but it also introduces complexity and potential risk. Trustees and advisers should not wait until a trust approaches its vesting date. Proactive review and action now can help preserve the integrity of your structures, safeguard tax efficiencies, and ensure your wealth planning is future-ready.

For tailored advice on deed variations, trust restructuring, or cross-jurisdictional trust considerations, please contact our Private Advisory team.