QLD TRANSFER DUTY EXEMPTION FOR LIMITED RECOURSE BORROWING ARRANGEMENTS ON TRANSFER FROM BARE TRUST SMSF

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By: James Tan & Andrew Lind

On 12 June 2013, a new exemption to the Duties Act 2001 (Qld) was introduced. This new exemption allows for the transfer of fund property from a custodian or bare trustee of a self-managed superfund (“SMSF”) to a trustee for the same SMSF to be transfer duty exempt. This exemption has been introduced retrospectively from 26 October 2011. This means that if the conditions for the exemption described below apply, the trustee or custodian may be eligible for a transfer duty refund.

Prior to the amendments introduced by Revenue Amendment and Trade and Investment Queensland Act 2013 (Qld), it was unclear as to whether transfer duty would be able exempt on the transfer from the custodian or bare trustee of a SMSF to a trustee of a SMSF. The Revenue Amendment and Trade and Investment Queensland Act 2013 (Qld) has now introduced a transfer duty exemption (by way of new section 130B in the Duties Act 2001), which clarifies this issue.

To be eligible for this exemption, the following conditions must be satisfied:

  • The fund property, or interest in the fund property, must not have ceased to be fund property; and
  • The members of the SMSF must have the same trust interest in the fund property after the property is transferred as they had immediately prior to the transfer..

Trustees of a SMSF who have received fund property from the custodian of the same SMSF and have paid transfer duty should consider applying for a refund of Transfer Duty.