Avoiding Stamp Duty- unit trust or separate trusts?

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

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  1. Arnel

    Arnel Well-Known Member

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    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. :)
     
    Arnel, 14th Jul, 2015
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Have you sought legal advice? considered a deed of partition?
     
    Terry_w, 14th Jul, 2015
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  3. Arnel

    Arnel Well-Known Member

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    @Terry_w thanks for the response mate,

    its not really a legal issue? accountant maybe?

    Deed of partition? sorry never had experience with this?
     
    Arnel, 14th Jul, 2015
    #3
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Its a legal issue.

    What state is the property located in?
     
    Terry_w, 14th Jul, 2015
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  5. Arnel

    Arnel Well-Known Member

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    Western Australia.
     
    Arnel, 14th Jul, 2015
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Terry_w, 14th Jul, 2015
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    sumterrence and Arnel like this.
  7. db444

    db444 Member

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    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?
     
    db444, 17th Jul, 2015
    #7
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    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.
     
    Terry_w, 17th Jul, 2015
    #8