Tax Tip 307: Transferring title to Bare Trustee without Triggering Stamp Duty

A legal owner of property can generally appoint someone else to hold that property as trustee for them without triggering stamp duty, or perhaps nominal duty.

This can be done before settlement or after and title can pass to the trustee (and back again).


Example

Bart owns a property. Its in his name and he appoints a company as trustee. Title transfers to the company. A few years later the Company transfers title back to Bart. Both transfers could be duty free.


Laws (some states)

VIC: S 35(1)(a) and (b) of the Duties Act 2000 (Vic) DUTIES ACT 2000 - SECT 35 Transfers to and from a trustee or nominee

NSW: S 58(1) and (2) of the Duties Act 1997 (NSW) DUTIES ACT 1997 - SECT 58 Establishment of a trust relating to unidentified property and non-dutiable property
WA: S 118 of the Duties Act 2008 (WA) DUTIES ACT 2008 - SECT 118

 

This could be great for land tax thresholds

 

It generally wouldn't change land tax - the beneficiary would still be assessed if a bare trust

 

Hi,
Is there any reference to this that you can share?

 

I setup a Bare Trust through @RPI Certus Legal. It seemed almost too good / easy to be true. It helped in a situation where my partner was unable to service her share of the loan but was still willing to pay her half of all the costs.

 

Can you share a reference to this please?

 

The OP provided links to the legislation.

 

Its about the duties act, which is stamp duty, my question was about the Land Tax...

 

I might write a future tip on this.

 

The bare trust is not a "owner". It is a custodian. This occurs with SMSF property held in a bare trust. OSR expect the SMSF to apply for the land tax registration not the trustee of the trust and will then consider the entitlement of a threshold based opon the beneficial owner.

It is generally wise to submit the bare trust deed or any apparent purchaser related documents with the OSR for their ruling and acceptance prior to acting and this will provide protection from duty on transfer and later transfer back to the beneficial owner. Its a issue I would be suggesting you take to a competent duties solicitor prior to any action so that the full chain of events are considered.
DUT041v2
Superannuation trust: section 62B
Duties Act evidentiary requirements: Section 62, 62A, 62B