Tax Bites

Exception to the NSW stamp duty relief for change of trustee

18th November 2014

  • NSW stamp duty relief is typically available for transfers of dutiable property upon a change in the trustee of a discretionary trust or unit trust.
  • Where the relief applies, a concessional $50 of duty is payable.
  • However, a notable exception is where the new trustee or continuing trustees either is “or can become” a beneficiary under the trust.
  • In such a situation, ad valorem duty calculated on the dutiable value of the property as at the date of the transfer should apply in most instances.
  • To avoid this in the case of a discretionary trust, the trust deed should provide that the new or continuing trustee is prohibited from being or becoming a beneficiary under the trust and that the prohibition is irrevocable.
  • Similarly, to avoid this in the case of a unit trust, the trust deed should provide that the new or continuing trustee is prohibited from holding units in the trust (and therefore prohibited from being or becoming a beneficiary of the trust) and that the prohibition is irrevocable.
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Tax Bites are general in nature and are not a substitute for specific advice. They are the opinion of Tax Advisory Specialists, and the ATO or the Courts may take a different view. They are not updated for changes in the law or the interpretation of the law since publication.

 

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