Question About Stamp Duty - uni student for assignment

Hi all,

I got one question.
In my assignment theres two brothers who purchase a property for their mother. They try to gift it to her, but there's a stamp duty to pay and the mother can't afford it so it never get's transferred officially.
They then gift the property for a life estate, irrelevant, but they do it to avoid stamp duty on the property because there's none for life estates.

Is it illegal to avoid stamp duty? My assignment is on equity and a lot of that is affected by illegal or fraudulent acts, clean hands ect.

Thank you.
Law Student.

 

welcome to InvestChat ,

now i have no official training ( in law or finance )

but if stamp duty is a problem , why not lease the property for life ( at a rent acceptable to all )

it is not illegal to minimize ( ask the late Kerry Packer ) but it is illegal to avoid or defraud

since one of the sons ( hopefully both ) is likely to out-live the mother , the property title need not change hands in the mothers life-time

BUT the lease WOULD have to be carefully written to cover the possibility the mother needed to spend the later years in a nursing home ( and she couldn't be evicted if one or more sons had a marriage breakup or bankruptcy )

think of the property as a distant granny flat ( where the mother is encouraged to stay ) or holiday home

having such an agreement would also protect the mother from fraud and other 'repairman tricksters

it is certainly not illegal to have a 'holiday home' where the mother is the live-in care-taker ( and the sons 'holiday' for say Xmas or Easter )

cheers

 

mkay so it is illegal to avoid. excellent. thank you. I love the rest of your answer. thank you.

 

the law is an interesting thing as you will find out as your study progresses

if you have spare time wade through the taxation act ,

it is also illegal to conspire to avoid tax , and the tax act reverses the burden of proof ,

cheers

 

I take it the land is in NT?
if so see s4B Duties Act
STAMP DUTY ACT 1978 - SECT 4B Tax avoidance schemes

You will need to consider this and whether the granting of a life estate amounts to being dutiable property.

But if they brothers bought the land for their mother they could be trustees for her and she the beneficial owner. Usually there is no duty in transferring from a trustee to a beneficiary, but I don't know what section this would be under the NT duties act.