Tax Tip 215: Transfer of Property to a Special Disability Trust and Stamp duty Exemptions

Discussion in 'Accounting & Tax' started by Terry_w, 19th Jun, 2019.

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  1. Terry_w

    Terry_w Broker, Lawyer, Tax advisor Business Member

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    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). DUTIES ACT 1997 - SECT 65 Exemptions from duty


    There are similar provisions in other states too, including:

    Section 38A Duties Act 2000 (VIC)
    DUTIES ACT 2000 - SECT 38A Special disability trusts


    Section 126A Duties Act 2001 (QLD)
    DUTIES ACT 2001 - SECT 126A Exemption—special disability trusts


    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 Tax Tip 159: No CGT on Transfer to a Special Disability Trust
     
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  2. paulF

    paulF Well-Known Member

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    Does the same apply if Homer wishes to transfer for his brother instead of his daughter ?
     
  3. Terry_w

    Terry_w Broker, Lawyer, Tax advisor Business Member

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    There is no relationship requirement in NSW for exemption from stamp duty:
    See subsection 22

    (22) Special disability trusts No duty is chargeable under this Chapter on:
    (a) a declaration of trust over dutiable property that is to be held by the trustee in the trustee's capacity as trustee for a special disability trust, or
    (b) a declaration of trust over property or an instrument that declares property, when vested in the person executing the instrument, is to be held in trust for a person or persons, if the instrument is executed for the purpose of establishing a special disability trust, or
    (c) a transfer of, or an agreement to transfer, dutiable property to the trustee of a special disability trust for the purpose of the trust, if there is no consideration for the transfer.
     
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