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Super borrowing arrangements: Qld duty exemption for transfers to SMSFs

The Duties Act 2001 (Qld) has been amended to provide a stamp duty exemption for the transfer of property from a custodian (that is, a bare holding trust) to a self-managed superannuation fund (SMSF) when the loan under a limited recourse borrowing arrangement (LRBA) is eventually repaid.

Stuart Jones, Thomson Reuters

The Revenue Amendment and Trade and Investment Queensland Act 2013 (assented to 12 June 2013) made the amendments to sections 130A and 130B of the Duties Act 2001 (Qld) to give effect to this stamp duty exemption on transfers of dutiable property from 26 October 2011.

Importantly, the transfer of dutiable property is only exempt from duty where the property is an "acquirable asset" that was held on trust by the custodian (that is, the bare holding trust) in compliance with section 67A(1)(a) of the SIS Act and transferred directly to the trustee of the SMSF[1].

Date of effect

The amendments are deemed to have commenced on 26 October 2011.

Thomson Reuters comment

The Tax Office considers that the in-house asset exemption under sections 71(8) and (9) of the SIS Act no longer apply once the loan under a LRBA is eventually repaid. Accordingly, the acquirable asset will need to be transferred from the holding trust back to the SMSF once the loan is repaid.

Therefore, it is crucial to obtain professional advice prior to entering a LRBA to ensure that this duty exemption will be available when the loan is ultimately transferred from the holding trust back to the SMSF.

Each state and territory has its own complex stamp duty rules, some offer concessions (subject to strict conditions) on certain transfers to superannuation funds where there is no change in the beneficial ownership of the property. For example, see section 41 of the Duties Act 2000 (Vic), section 62A of the Duties Act 1997 (NSW) and sections 122 and 124 of the Duties Act 2008 (WA).

Source: This article was first published in Thomson Reuters' Weekly Tax Bulletin. To subscribe to Weekly Tax Bulletin, or for more information, please:

More Cleardocs information on related topics

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[1] Section 130B(3) of the Duties Act 2001 (Qld).

 

Lawyer in Profile

Julian Smith
Julian Smith
Partner
PH: 61 3 9258 3734

Julian Smith is a partner in the Maddocks Commercial team.

Julian advises extensively in the following areas:

  • trusts law;
  • self managed super funds;
  • business and company sales and acquisitions; and
  • financial services law.

Julian advises clients ranging from public companies servicing the wholesale financial services market to high net worth individuals and their advisers.

Julian has been with Maddocks since undertaking articles in 2001.