Transfer of Property to a Special Disability Trust and Stamp duty Exemptions

In NSW there is a stamp duty exemption for the transfer of property to a Special Disability Trust (SDT). This can apply for a declaration of trust s65(22)(a) or (b) Duties Act 1997 (NSW) or for a transfer to the trustee of an SDT s65(22)(c).  http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/nsw/consol_act/da199793/s65.html

There are similar provisions in other states too, including:

Section 38A Duties Act 2000 (VIC)
http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/vic/consol_act/da200093/s38a.html

Section 126A Duties Act 2001 (QLD)
http://classic.austlii.edu.au/au/legis/qld/consol_act/da200193/s126a.html

 Example

Homer has an investment property which he wishes to transfer to a special disability trust for his daughter who has a severe disability. Title is transferred from Homer’s name to that of a professional trustee and there is no stamp duty charged on this transfer.

Note that there are also CGT exemptions available too.

See:

Tax Tip 159: No CGT on Transfer to a Special Disability Trust            https://www.propertychat.com.au/community/threads/tax-tip-159-no-cgt-on-transfer-to-a-special-disability-trust.23076/

Discuss at

https://www.propertychat.com.au/community/threads/tax-tip-215-transfer-of-property-to-a-special-disability-trust-and-stamp-duty-exemptions.39643/

Stamp Duty Exemptions for fixing Mistakes

Sometimes mistakes happen when registering property ownership. Ownership may be registered in the wrong percentages for joint owners for example. There are exemptions available to fix mistakes such as these without the need to pay duty a second time.

One example seen recently was where the client had owned the property 50/50 with their spouse. They didn’t realise this mistake until refinancing many years later and having a solicitor look over their situation. Evidence was produced that they requested the ownership be 99/1% but their original conveyancing solicitor disregarded or missed this when preparing the transfer and as a result the ownership ended up as tenants in common in equal shares.

This was rectified under section 65(14) of the Duties Act NSW without the need to pay additional stamp duty and the ownership ended up with the originally intended 99/1% split as tenants in common.

Normally changing from 50/50 to 99/1 would have resulted in duty being charged a second time on 49% of the property value.

 

Written by Terry Waugh, solicitor at www.structuringlawyers.com.au