Changes to the duties laws in Queensland are set to benefit SMSFs using strategies that include limited recourse borrowing arrangements (LRBA).
In particular, section130B of the Queensland Duties Act stipulates the situations where a stamp duty exemption is applicable when an asset, namely property, is being transferred from a holding trust to an SMSF trustee.
The new section stipulates no transfer duty will be levied when a property is being transferred from a custodian to a trustee, or vice versa, if the super fund in question continues its ownership of the property and the transfer does not change the members’ interest in the asset.
“The changes are positive for SMSF trustees. They remove any confusion as to how to apply for the concessional duty on the transfer of the property by the holding trustee back to the fund following repayment of the loan,” Townsends Business and Corporate Lawyers principal Peter Townsend said.
“The change in legislation doesn’t close the door on using the previous ‘apparent purchaser’ method which involved proof (and recognition by the Queensland Duties Office) of an agency relationship between the fund and the holding trustee.
“However, the new legislation is clearly a much easier alternative in that it is targeted specifically at LRBA transfers. The previous method was not expressly drafted for superannuation transactions of this nature.”
In order for the new section to apply, the SMSF must show it has elected to be a regulated fund and that the transaction in question is compliant with the Superannuation Industry (Supervision) Act 1993.
The change to the Queensland Duties Act was made on 12 June this year and is effective from 26 October 2011.
