A trust account is a bank account where you can hold money on behalf of another person.
You need to use a trust account only if you receive trust money from customers and clients for the following reasons:
- money received with a direction for use from a client. This is money paid in advance to the motor dealer with a letter authorising them to use it for specific purposes, such as advertising, marketing expenses and searches
- money from consignment sales.
You must tell us before you open a trust account.
Opening, closing or changing a trust account
You must notify us within 14 days if you:
- open a general trust account or special trust account
- change the name of a general trust account or special trust account
- close a general trust account or special trust account.
You can only open a trust account or a special trust account at an approved financial institution (listed below).
The written notice must state the following:
- whether the account is a general trust account or a special trust account
- the name of the financial institution where it is (or was) kept
- the account name
- the identifying number of the financial institution (the BSB)
- the account number.
You can provide these details using the PAMD form 19 - Notification of opening, closing or change of name of trust account (PDF, 78 KB).
Approved financial institutions
- Australia & New Zealand Banking Group
- Bank of Queensland Limited
- Bank of Western Australia Ltd
- Bendigo Bank Limited
- Capricornia Credit Union
- Commonwealth Bank of Australia
- Heritage Building Society
- HSBC Bank Australia Limited
- Macquarie Bank Limited
- National Australia Bank Limited
- Queensland Country Credit Union
- The Rock Building Society Limited
- St. George Bank Limited
- Suncorp-Metway Ltd
- Westpac Banking Corporation
You must issue a receipt as soon as you receive trust money. Under the Act you must only use a receipt that is titled ´Property Agents and Motor Dealers Act 2000 - Trust Account Receipt´
The receipt contains the:
- your dealer´s name
- receipt date
- name of person on whose behalf you completed the receipt
- name of person on whose behalf you received the money
- brief description of the transaction/matter for which you received money
- amount received in numerals
- how you received the money, e.g. cash, cheque, credit card, electronic transfer
- signature of the person completing the receipt.
If you have trust account receipts titled ´Auctioneers and Agents Act 1971´, they may still be valid. However, you need to stop using these receipts and dispose of them as soon as possible.
If a person electronically transfers money to you, issue a receipt as soon as you realise you have received it. This will probably be a transaction notification statement issued electronically by the financial institution.
If the person paying the money is different from the person on the contract of sale, make the receipt out to the person paying the money. However, include a note that the payment was made on behalf of the names on the contract of sale.
Receipts in non-trust accounts
If a motor dealer receives a payment from a buyer, prospective buyer or an option holder, the motor dealer must give them a receipt headed ´Property Agents and Motor Dealers Act 2000´.
It must contain the:
- motor dealer´s name
- name of the buyer, prospective buyer or option holder
- vehicle´s purchase price
- payment date
- cheque´s drawer (if paid by cheque)
- payment amount
- vehicle´s make
- vehicle´s body model
- vehicle´s colour
- vehicle´s engine number or, if a caravan, chassis number
- vehicle´s identification number
- vehicle´s registration number
- vehicle´s year of manufacture
- name and signature of the person giving the receipt.
Please contact our Funds Administration and Support branch to change details of a trust account.
Withdrawing from a trust account
You can only withdraw money, including transaction expenses, fees, charges and commissions if:
- all parties to the transaction (or their representatives) authorise it in writing
- money already in the account can be used for that purpose.
You can also withdraw it once the transaction is finalised, e.g. when the contract for a sale has been settled or terminated.
If you cannot find the beneficiaries of money held in a trust account, contact Public Trust. They will advise you where to send it.
Making electronic funds transfers
Distribute all trust money directly from the trust account. It is illegal to transfer money to recipients via a general account.
If your bank does not allow this, negotiate the bank to allow EFT functions, consider changing banks, or issue cheques payable from the trust account.
Keeping trust account records
Keep your trust account records for five years. These records include:
- a register of trust account receipt forms
- consecutively numbered, trust account receipt forms in duplicate
- a trust account deposit book of trust account deposit forms in duplicate
- a trust account cash book
- a trust account journal of consecutively numbered folios
- a trust account ledger.
You must also keep full and accurate accounts of all money you pay or receive for a sale or transaction.
You must keep your books, accounts and records so that they can be audited easily and properly.
Trust account not used during audit period
You are not required to submit an audit report for a trust account not used during an audit period.
However, you are required to submit a statutory declaration saying that you did not operate a trust account during the audit period.
It is your responsibility to notify a customer if a cheque bounces.
Last reviewed 21/11/2011