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Role of the trustee on accountant trust accounts

A trust account is a business bank account used by a public accountant to hold funds on behalf of clients.

Under the Trust Accounts Act 1973 and Trust Accounts Regulation 1999, a public accountant who manages client funds is a trustee and must therefore:

  • comply with prescribed requirements of the trust account legislation
  • report annually to the supervising entity that oversights trust accounts in Queensland (i.e. the Department of Justice and Attorney-General)
  • provide other information as requested by us.

Setting up a trust account

Before setting up a trust account with your bank, you need to advise us that you intend to create a trust account and provide the name and branch of the financial institution in Queensland where the account will be set up.

If your financial institution requires our approval to set up a trust account, we will correspond with your bank about granting permission.

Within 14 days of setting up a trust account, you must lodge a notification of new trust account (Form 1). This lets us know that you have become trustee. This notice confirms that you have registered as trustee under the Act.

Learn more about this in the new trust account checklist (Form 1A).

Appointing an auditor

You must provide us with details of the auditor appointed to your trust account within 30 days of becoming a trustee.

Before appointing the auditor, you must ensure the auditor meets the criteria under the Act—see sections 14 and 15.

Provide the full name and business address of the auditor and ask them to endorse that appointment by emailing us.

If your auditor ceases to be the auditor for your trust account, you must advise us within 30 days from the end of the appointment and provide details of the new auditor appointed to your trust account.

Changes to a trust account

You need to advise us within 14 days of changes to the trust account.

Where changes are made to the trust account name, business and contact details, and/or addition of new trustee, please notify us by submitting a maintenance of particulars (Form 2).

When a trustee resigns they must immediately notify us using a cease to be trustee (Form 3).

Annual reporting on a trust account

The financial period for a trust account is 1 April to 31 March.

Once a trust account has been set up there are compulsory reporting requirements to meet each year.

At the end of the financial period you must provide the following information (at a minimum):

  • statement of highest amount held in trust
  • independent auditor’s report.

Statement of highest amount held in trust

Submit a written statement declaring the largest amount of monies held in your trust account during the financial period, as prescribed under section 31(1).

This statement is to be witnessed by a Justice of the Peace or Commissioner for Declarations and be lodged no later than 14 April each year.

Statements must be submitted using either a Form 4A or Form 4B.

Use maximum cashbook declaration (Form 4A with exemption) where the trustee meets both of the following conditions of the ministerial exemption (24 May 2002):

  • The nature of the business relates solely to income tax refunds.
  • The tax refunds are paid out at the end of each working day, for a daily cashbook balance of nil.

Otherwise, use maximum cashbook declaration (Form 4B) for those trust accounts where funds are:

  • not cleared on a daily basis
  • not solely for income tax returns.

You must provide an original financial security when you lodge a Form 4B. The security instrument is required by 14 April and the amount required is whichever is lower of either:

  • a third of the amount declared on your Form 4B
  • $10,000.

Send the original security to:

Internal Audit Unit
Department of Justice and Attorney-General
GPO Box 149
BRISBANE  QLD  4001

Independent auditor’s report

It is the trustee’s responsibility under section 16(1)(b) to lodge an independent auditor’s report for the financial period ending 31 March each year.

You must lodge the audit report with us no later than 31 May each year.

The report must fully address the 25 point checklist, as prescribed at section 23(1) of the regulation.

Further guidance on the checklist is provided in the information for audit report schedule (Form 5).

The audit report must be submitted on the auditor’s business letterhead and forwarded electronically by the trustee.

Closing a trust account

When a trust account is closed, the trustee must:

  • immediately complete and lodge a closure of a trust account (Form 6)
  • arrange for an independent audit of the trust account from the start of the financial year up to and including the date of closure
  • lodge the final audit report within 2 months of closing the trust account.

Once you have completed all of these requirements and resolved all outstanding issues, we will return any trust account security held by the department directly to the issuing financial institution.

Contact us

The supervising entity to the Trust Accounts Act 1973 is:

Internal Audit Unit
Department of Justice and Attorney-General
Email: trustaccounts@justice.qld.gov.au
Phone: (07) 3738 9202 or (07) 3738 9203

More information