Join Australia's most dynamic and respected property investment community

Avoiding Stamp Duty- unit trust or separate trusts?

Discussion in 'Accounting & Tax' started by Arnel, 14th Jul, 2015.

  1. Arnel

    Arnel Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    130
    Location:
    Perth
    Hi PC'ers :)

    I am doing a development with two other people, effectively three entities.

    Initially we where going to put all three separate entities on the contract of sale to secure the land. Main reason behind that was once the dev is completed on the back end we would be able to split units (2 for x person 2 for y person 2 for z person) among us three without doing a transfer and paying stamp duty again.

    I was advised that this is not possible? And to go with a unit trust.

    Apparently regardless if you purchase the property as a unit trust or three separate entities you will end up paying stamp duty to get your share of the units on your own entity (for refinancing purposes/sales).

    Has anyone had any experience in this?

    I really don't want to pay stamp duty on the purchase of land and then on the back end to transfer respectively


    Any advice would be greatly appreciated. :)
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,970
    Location:
    Sydney
    Have you sought legal advice? considered a deed of partition?
     
  3. Arnel

    Arnel Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    130
    Location:
    Perth
    @Terry_w thanks for the response mate,

    its not really a legal issue? accountant maybe?

    Deed of partition? sorry never had experience with this?
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,970
    Location:
    Sydney
    Its a legal issue.

    What state is the property located in?
     
  5. Arnel

    Arnel Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    130
    Location:
    Perth
    Western Australia.
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,970
    Location:
    Sydney
    sumterrence and Arnel like this.
  7. db444

    db444 Member

    Joined:
    25th Jun, 2015
    Posts:
    10
    Location:
    WA
    Hi,
    I would be interested if there is a correct way to do this with two joint owners buying land before subdivision and avoiding or minimising stamp duty?
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,970
    Location:
    Sydney
    There no one correct way, but there are ways to structure things to eliminate or minimise stamp duty. Both parties could enter into a deed partitioning the land when they purchase the property. This way each can end up with their respective pieces after sub-division which reflects the initial partitioning. Stamp duty would be minimal or nominal when titles are split into separate names later.