Each State varies as to its requirements concerning the dating of bare trusts relative to contracts and the name of the Purchaser on a contract for sale of land. Where these requirements are not met, the limited recourse borrowing arrangement may be subject to double stamp duty or ineligibility to access concessional or reduced duty. Each State’s requirements are set out below.
New South Wales
In each state, it is imperative that the bare trustee entity first be incorporated prior to entering into any contract of sale and executing the bare trust deed. The tables below set out the name that should appear on the contract of sale, and when the bare trust deed should be executed.
| Name on Contract of Sale | [Bare Trustee Name] Pty Ltd ACN XXX XXX XXX - note no name required for the bare trust, although it can be named. |
| Bare Trust Deed Execution Date | After exchange – three months to stamp but note that the bare trust deed can even be executed post settlement. |
| Duty Payable on Trust Deed | $500 but to increase to $750 on 1 February 2024 |
In establishing a limited recourse borrowing arrangement ('LRBA') there will be two taxing points in which stamp duty liabilities will arise
- (1) On the purchase of the property; and
- (2) On the bare trust deed instrument (but subject to exemption if the true ownership exemption under s55(1)(ii) can apply).
The acquisition of the property will be subject to full ad valorem stamp duty (s 8 Duties Act 1997). A declaration of trust is also a dutiable transaction under s 8 of the Duties Act 1997. A declaration of trust means any declaration (other than by will or testamentary instrument) that any identified property vested or to be vested in the person making the declaration is or is to be held in trust for the person or persons, or the purpose or purposes, mentioned in the declaration.
There is an exemption which can apply known as the true owner exemption which is obtainable by an SMSF if it keeps all records to prove it paid for or borrowed the money to pay for the subject property. If that is done, section 55(1)(ii) can be relied upon.
Section 62B of the Duties Act 1997 charges duty of $500 on a declaration of trust made by a custodian of the trustee of a self-managed superannuation fund (‘SMSF’) that dutiable property is or is to be held in trust for the trustee of a SMSF. The fund needs to be named in the declaration of trust, and ad valorem duty must have been paid on the acquisition of the property by the custodian or the trustee of the fund. It also needs to be shown that the trustee of the fund provided, or will provide, the consideration for the acquisition.
Victoria
In Victoria the bare trust deed should be dated after exchange and before completion. No duty will be payable on the trust instrument, however a copy of the bare trust deed will need to be provided to the Victorian State Revenue Office.
| Name on Contract of Sale | [Bare Trustee Name] Pty Ltd ACN XXX XXX XXX - note – no name required for the bare trust, but it can be named |
| Bare Trust Deed Execution Date | After exchange and before completion (slightly different to NSW) but within 30 days of execution |
| Duty Payable on Bare Deed | Nil. |
The duty is imposed (in the absence of proof of the true owner exemption) in s7(1)(b)(i) Duties Act 2000 but subject to exemption under the terms of s34(1)(a)(i).(property vested in an apparent purchaser)
Queensland
Legislation is contained in a combination of ss 9 and 66 Duties Act (Qld). The requirement of the naming of the party the way it is arises from Revenue office requirements.
| Name on Contract of Sale | [Bare Trustee Name] Pty Ltd ACN XXX XXX XXX as trustee for [Name of Bare Trust] – note a name is required |
| Bare Trust Deed Execution Date | Before exchange of contract |
| Duty Payable on Bare Deed | Nil. |
Western Australia
Legislation is a combination of ss11(1) and 118 Duties Act 2008 (WA)
| Name on Contract of Sale | [Bare Trustee Name] Pty Ltd ACN XXX XXX XXX as trustee for [Name of Bare Trust] – so requirement to give a name to the bare trust |
| Bare Trust Deed Execution Date | After exchange – two months to stamp |
| Duty Payable on Bare Deed | Nil. |
South Australia
Legislation is a combination of s71(3) and s71(7a) Stamp Duties Act 1923
| Name on Contract of Sale | [Bare Trustee Name] Pty Ltd ACN XXX XXX XXX – so no requirement to name the bare trust |
| Bare Trust Deed Execution Date | After exchange and before completion |
| Duty Payable on Bare Deed | Nil. |
Australian Capital Territory
Legislative reference are to ss7 and 56 Duties Act 1999 (ACT)
| Name on Contract of Sale | [Bare Trustee Name] Pty Ltd ACN XXX XXX XXX so no requirement for the name of the bare trust, but it can be done |
| Bare Trust Deed Execution Date | After exchange |
| Duty Payable on Bare Deed | $20 |
Northern Territory
Legislative reference is to s56BA Stamp Duty Act 1978 and item 7, Schedule 1.
| Name on Contract of Sale | [Bare Trustee Name] Pty Ltd ACN XXX XXX XXX as trustee for [Name of Bare Trust] as bare trustee for [SMSF Trustee] Pty Ltd ACN XXX XXX XXX as trustee for [Name of Super Fund] ABN XXX XXX XXX |
| Bare Trust Deed Execution Date | Before exchange |
| Duty Payable on Bare Deed | $20 |
Tasmania
Legislation is a combination of ss16(4) and 39(1)(a) Duties Act 2001.
| Name on Contract of Sale | Holding Trustee Pty Ltd ACN XXX XXX XXX |
| Bare Trust Deed Execution Date | After exchange |
| Duty Payable on Bare Deed | $20 |
Please note that the state by state fees for the stamping of bare trust deeds may have changed since the publication of this article and readers should check as to the current fees in each office and not rely solely on the fees quoted in the article. Readers should additionally seek their own advice relevant to their own circumstances from advisors acting on any particular transaction. Any client with questions should email us at online@petergell.com.au.
