SMSF Update | November 2024
This session provides a comprehensive overview of key updates from the superannuation sector over the past six months, along with practical strategies to effectively support your clients. […]
Acis, current as of: 14 September 2017.
We’ve canvassed in previous issues of Acis All Areas the impact on your trust of the location in which it is established. We’re revisiting the topic this time around to consider how State-based duties laws are relevant to your trust.
The general rule is that when a trust is established in a specific State, the duties legislation of that State determines if duty is payable on the trust’s establishment. Each State has slightly different rules and rates of duty which may be assessed on a trust deed.
If, for instance, a trust was established in Queensland, the Queensland Duties Act applies to the settlement. As there is no duty payable in Queensland on a trust established in Queensland over unidentified or non-dutiable property, no duty is payable. Because the trust was settled in Queensland, no settlement duty should be payable in any other State or Territory.
Provided it is properly established in the first place, there should be no reason why the trust can’t then operate in any other jurisdiction or in multiple jurisdictions. When the trust acquires assets, it will then pay transfer duty on any acquisition of dutiable property, usually based on the State in which the transaction takes place, or where the asset is located.
Each State has its own rules regarding the payment of duty on the acquisition of dutiable property, and the jurisdiction stated in the trust deed will not change that. In our example, if the trust deed nominates the jurisdiction as Queensland, and the trust acquires dutiable property in NSW, transfer duty will be charged in NSW and not Queensland.
Of course, depending on where it is operating, there may be local laws which regulate the trust’s activities; however, the application of such laws is a separate issue to the establishment of the trust.
There is generally no problem with the trustee changing the jurisdiction of the trust to another State without a duty consequence. We’d always suggest that you obtain specific advice before making such a change.
Feel free to contact us any time to discuss how State-based duties laws are relevant to your trust.
This session provides a comprehensive overview of key updates from the superannuation sector over the past six months, along with practical strategies to effectively support your clients. […]
Advisors value corporate trustees over individual ones, but clients are often deterred by higher setup costs. To help advisors, we’ve compiled key reasons for choosing a corporate trustee. […]
The ATO’s increased focus on market valuations, asset titles, contributions, and other key areas makes it essential to stay up to date with the latest regulatory requirements. […]