Forman Financial Services

Special Disability Trust (SDT) Simple Explanation

What is it?

The Special Disability Trust (SDT) is a trust structure established to provide for a person with severe disability.

The benefit using SDT:

Concessional for means tested for Government Pension like Aged Pension or Carer Pension

  • Gifting Concession for eligible family member who donates to the SDT (up to $500,000)
  • Asset Test Exemption for beneficiary of the SDT.  Up to $647,500 as at 1st July 2016
    The amount is indexed annually.
  • Income Test Exemption for beneficiary of SDT of all trust income.


  • Capital Gains Tax exemption for asset donated into the SDT
  • Unexpended Income of the SDT taxed at the beneficiary personal income tax
    rather than at the highest marginal tax rate

Steps to establish the SDT

  1. Receive approval from the Department of Human Services that the beneficiary qualified
  2. Obtain the Model Trust Deed
  3. Establish at Trust
  4. Donation the asset to the Trust
  5. Invest


  • Payment of income from the Trust to the beneficiary
  • Preparation of financial statement as at the 30th June every year by a qualified accountant
  • Keep records of expenditure if audited


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