Trust exemptions
Exemptions from duty for certain dutiable transactions involving trusts.
Key information
Some dutiable transactions involving trusts are exempt from duty, including:
- trustee changes
- apparent purchasers
- transfers to beneficiaries
- transfers involving nominees or custodians.
Each exemption has specific requirements that must be satisfied.
Trust exemptions are not automatic and you must provide evidence to support your claim. You must lodge the transaction in Duties Online. Trust exemptions are generally assessed as complex transactions.
Change in trustees
An exemption may apply when dutiable property held under a trust is transferred to a new trustee because a trustee retires or a new trustee is appointed. The trust must exist before the transfer and continue after it. The transfer must occur solely because of the change in trustee and must not result in any change in beneficial ownership of the dutiable property.
You do not need to lodge a deed that only appoints or retires a trustee. If dutiable property is transferred to a new trustee, you must lodge the transfer through Duties Online. To claim the exemption, you must also lodge the deed and relevant supporting documents.
Apparent purchaser
A person (an apparent purchaser) may purchase dutiable property and hold it on trust for someone else (a real purchaser). An exemption may apply to:
- a declaration of trust by the apparent purchaser in favour of the real purchaser
- a transfer of dutiable property from the apparent purchaser to the real purchaser.
We must be satisfied that the real purchaser provided, or will provide, the purchase money for the property. If the purchase money came from someone else, you must provide evidence explaining how and why it was provided. You do not become the real purchaser just because you later start paying or contributing to the mortgage.
If the real purchaser provided only part of the purchase money, the exemption only applies to that part.
Bare trustee or nominee
An exemption may apply to a transfer of dutiable property to a bare trustee or nominee, to be held solely for the transferor without any change in beneficial ownership.
An exemption may also apply to:
- a declaration of trust by the bare trustee or nominee over that property, where it is held solely for the transferor without any change in beneficial ownership
- a re-transfer of the property back to the transferor, provided no other person has had a beneficial interest in the property between the original transfer and re-transfer.
Custodian transfers
An exemption may apply to a transfer of dutiable property between:
- a trustee and a custodian of the trust
- custodians or sub-custodians of the same trust.
The exemption applies only where the transferee holds the property solely in its capacity as trustee, custodian or sub-custodian.
Distribution of trust property to a beneficiary
An exemption may apply when a trustee transfers dutiable property to a beneficiary or unitholder of the trust. Different requirements apply for fixed trusts, discretionary trusts and unit trust schemes. For fixed trusts and unit trust schemes, the exemption may apply in full or in part, depending on the extent of the interest of the beneficiary or unitholder.
Distributions from discretionary trusts
For a discretionary trust, the beneficiary receiving the property must usually have been a beneficiary when the property first became part of the trust. This is called the relevant time.
The beneficiary may be an individual, company or trust. Extra requirements apply if the beneficiary is a company or trust. Some limited rules apply for natural persons who became beneficiaries after the relevant time, such as through a spouse, domestic partner, child or descendant relationship.
Other requirements must also be satisfied. These include whether duty was paid when the property became part of the discretionary trust and whether the transfer involves any payment or other benefit. A benefit may include forgiving a loan or releasing a person from a debt or other liability.
The exemption is not usually available where the property is transferred to:
- a company or trust that did not exist at the relevant time
- a company whose shareholders are not all natural persons who were beneficiaries of the discretionary trust at the relevant time
- a trust whose beneficiaries include companies, trusts or other persons who do not meet the beneficiary requirements.
Other trust exemptions
Some trust exemptions relate to:
Whether an exemption applies depends on the type of transaction and whether the specific exemption requirements are satisfied. Refer to the Evidentiary Requirements Manual, which lists the documents required for each exemption.