Stamp duty laws in NSW have been amended, resulting in the scrapping of a concession that applied to the change of trustees of self-managed superannuation funds (SMSFs) and making the employment of corporate trustees for these funds more attractive.
"Prior to 1 July 2010, each transfer of property to a new trustee would have been stampable at $50. Now, if the trustees are individuals and the transfer is going from individual to individual or from company to individual, that transfer will now be subject to ad valorem duty, which is extraordinary," Townsends Business & Corporate Lawyers special counsel Michael Hallinan said.
It means if an individual trustee is added or removed from an SMSF in NSW, stamp duty will be charged at a rate proportionate to the value of the asset that is having to be transferred into the new trustee's name.
SMSF trustees are still entitled to pay $50 stamp duty in some circumstances where assets are being transferred, as long as three conditions are met.
"One is that none of the continuing trustees remain or can become a beneficiary of the fund. Two, the new trustee cannot become a beneficiary of the fund. And three, the transfer is not part of a scheme," Townsends Business & Corporate Lawyers principal Peter Townsend said.
One way of avoiding being caught out by the legislation change is to use a corporate trustee for an SMSF, according to Townsend.
"At this stage, I cannot see how you can use an individual trustee for a new SMSF in NSW given the prospect of there being a duty at any time of change and that includes death," he said.
