New self-managed superannuation funds (SMSF) set up in New South Wales have been granted more favourable stamp duty treatment after an amendment to the NSW Duties Act 1997.
The change has been made to the application of section 62A, which allows a nominal stamp duty, as low as $50, to apply when transferring a property into an SMSF previously owned by a member of the fund or an in specie transfer.
In the past, the concession only applied if the SMSF was regulated and was a complying fund. This meant the trustees would have a notice of compliance issued by the Australian Taxation Office (ATO).
However, this arrangement was problematic for newly-established SMSFs as the ATO notice of compliance was unable to be issued until the first annual return for the fund had been submitted and processed.
It meant new funds looking to make an in specie property transfer soon after set up were subject to pay a higher level of stamp duty.
The amendment will now allow a newly-established SMSF to qualify for the stamp duty concession regarding an in specie property transfer if the trustees of the fund are satisfied it meets the ATO’s conditions of a complying fund at the time the stamp duty liability is incurred.
Under the amended legislation, the Office of State Revenue will have the right to impose a higher stamp duty charge on the SMSF if it feels the conditions to qualify for the concession are not met.
In an additional legislative development, the NSW Land Tax Management Act 1956 has also been changed so SMSFs are now entitled to the NSW land tax zero rate threshold.
Before now, this threshold was only available to superannuation funds deemed complying under section 42 of the Superannuation Industry (Supervision) (SIS) Act 1993.
SMSFs are deemed complying under section 42A of the SIS Act and this has now been taken into account.
Both of the changes above received royal assent on 11 April via the State Revenue Legislation Amendment Act 2012.
