Consider this if…
- You are buying a pharmacy and need a structure the Authority will approve
- Your accountant has set up a family trust and you are not sure it complies
- You want your spouse or children to benefit and they are not pharmacists
- You already own pharmacies and are considering another
- An investor or supplier has offered to fund your pharmacy
- You are a pharmacist writing a will and do not know what happens to the business
How it works
Tell us the structure you have or want
Who the pharmacists are, whether there is an existing trust or company, and whether anyone who is not a registered pharmacist is involved in any way.
Timing confirmed with the scope
We review the deed against the ownership rules
The beneficiary or unitholder class, the trustee, the appointor, and any clause that could let a non-pharmacist take a benefit or exercise control. A standard family trust deed will almost always fail on the beneficiary class alone.
Timing confirmed with the scope
We draft or amend
A deed drawn so the class is restricted to registered pharmacists and pharmacist-only companies, with the trustee and appointor arrangements to match.
Timing confirmed with the scope
Submission and follow-through
We prepare what the Authority needs and deal with queries. Getting the deed right first time is the point — a deed sent back for amendment holds up approval and attracts a further fee.
Timing confirmed with the scope
The parts nobody thinks about
What happens to the business on death or incapacity, and whether the arrangements with landlords, financiers and suppliers create a problem under the undue influence rules.
Timing confirmed with the scope
Fee
Quoted in writing before we start
GST inclusive
Excludes: Authority fees, ASIC fees and any duty on establishing a trust deed are set by others and are additional.
Quoted in writing before we start. Reviewing an existing deed and drafting a new structure are different pieces of work and are priced separately.
Why a pharmacy trust is not a family trust
Most trusts are drafted to be broad. The beneficiary class takes in the primary beneficiaries, their spouses, their children, related entities and often charities, because breadth is useful — it gives the trustee options.
A pharmacy trust has to be the opposite. Victorian law restricts who may hold a proprietary interest in a pharmacy business, and the definition of proprietary interest reaches beneficial interests, including those held as a beneficiary of a trust. So every person in the beneficiary class must themselves be permitted to own a pharmacy.
That is why a standard family trust deed — the sort an accountant might set up efficiently and inexpensively — will usually fail. Not because it was drafted badly, but because it was drafted for the ordinary case, and this is not the ordinary case.
What the rules actually restrict
Who may own. Registered pharmacists. Companies where all directors and all shareholders, legal and beneficial, are registered pharmacists. And certain friendly society companies registered before 1 July 1999.
What counts as an interest. A legal or beneficial interest, held in any capacity — as a proprietor, a partner, a director or shareholder, or as trustee or beneficiary of a trust. The breadth is deliberate. Adding a holding company or a second trust does not put distance between a non-pharmacist and the pharmacy.
How many. There is a limit on the number of separate pharmacy businesses a pharmacist or eligible company may hold an interest in, and the Authority counts interests held through trusts — as trustee and as beneficiary — toward it.
Control, not just ownership. Arrangements that give a non-licensee effective control over the pharmacy's operations, access to its records, or payments calculated on its profits can be void. This is the provision that catches commercial arrangements which look perfectly normal in any other industry.
The deed problems we see most often
The spouse in the beneficiary class. Almost universal in deeds not drafted for pharmacy, and fatal.
A general "any related entity" clause, which sweeps in entities that are not pharmacist-owned.
A trustee company with a non-pharmacist director — often a spouse added for practical reasons, or an accountant added as a second director.
An appointor or guardian who is not a pharmacist, holding the power to remove and replace the trustee. Control sits there, and the Authority looks at it.
Unit option arrangements giving someone a future right to acquire units.
Financing and management agreements with profit-linked payments, or with step-in rights that would put a non-licensee in control on default.
What we do
We review an existing deed against the ownership rules and tell you plainly whether it complies, what has to change, and whether the structure around it — the trustee company, the appointor, the financing — creates a problem the deed itself does not show.
Where a structure is being set up, we draft it to comply from the start, which is considerably cheaper than amending and resubmitting. A deed sent back holds up approval and attracts a further fee, and if you are mid-purchase that delay lands on a settlement date.
We also look at the arrangements around the business — the lease, the financing, supplier and management agreements — because the undue influence provisions bite on documents that have nothing to do with the trust deed.
The succession problem
Pharmacy ownership rules do not pause for a death.
Because only registered pharmacists may hold an interest, a pharmacist cannot leave the trust units, or the shares in the trustee company, to a spouse or child who is not registered. A will that purports to do so does not work, and the family is left holding a valuable business they are not permitted to hold, at the worst possible time.
The answer is planning it in the structure and in the will together: buy-sell arrangements with other pharmacist owners, funded so the money is actually there; provisions dealing with what happens to the business rather than to the shares; and a will drawn in the knowledge of what the licensing rules permit.
Most pharmacists we speak to have a will, and it does not deal with this.
Working with your accountant
Structure decisions here sit across law, tax and licensing. Your accountant will have a view on the tax outcome and we will not second-guess it. What we add is whether the structure that achieves it is one you are actually permitted to have. Where the two conflict, it is better to find out before the deed is executed.
Frequently asked questions
Can a non-pharmacist own a pharmacy in Victoria?
No. Ownership is restricted to registered pharmacists, to companies where all directors and all shareholders — legal and beneficial — are registered pharmacists, and to certain friendly society companies registered before 1 July 1999. The restriction is on holding a proprietary interest, which is defined broadly, so structuring around it by adding layers of entities does not work.
Can my spouse be a beneficiary of my pharmacy trust if they are not a pharmacist?
No, and this is the single most common defect we see. A standard discretionary trust deed includes spouses and children in the beneficiary class by default. In a pharmacy trust that is a compliance failure, because being a beneficiary is itself holding a proprietary interest. The deed has to restrict the class to registered pharmacists and pharmacist-only companies — which is not something an off-the-shelf family trust deed does.
How many pharmacies can I own in Victoria?
There is a cap on the number of separate pharmacy businesses a registered pharmacist or eligible company may own or hold an interest in. Importantly, the Authority applies it to trustees and beneficiaries of a pharmacy trust, not only to the person whose name is over the door — so interests held through several structures are counted together. If you are approaching the limit, work out where you stand before you sign anything.
What happens if my trust deed is not compliant?
The Authority reviews deeds and runs an audit program. A deed that does not comply has to be amended, approval is held up until it is, and a further fee applies to the re-review. Beyond the delay and the cost, a non-compliant structure is a regulatory exposure for a business whose licence is the thing it is built on.
An investor has offered to fund my pharmacy. Can I take it?
Very carefully, and often not in the form offered. The legislation voids arrangements that let someone who is not a licensee control the pharmacy's operations, access its records beyond what compliance requires, or take payments based on its profits. That catches a good deal of ordinary commercial drafting — management agreements, profit-share arrangements, option arrangements over units, and loan terms with performance-linked returns. The funding may still be possible; the documents usually need rewriting.
What happens to my pharmacy if I die?
This is the question most pharmacists have not asked. Because only pharmacists can hold an interest, you cannot simply leave the trust units or the trustee company shares to a spouse or child who is not registered. A will that tries to will fail in that respect, and the family can be left with a valuable business they are not permitted to hold. It needs planning in the structure and in the will together, which is why we look at both.
Related services
If you are mid-purchase, tell us the settlement date — Authority timeframes are not always quick.
Send us your deed