SMSF LRBAs – New Transfer Duty Exemptions

Recent amendments to the Duties Act 2001 (Qld) have seen the introduction of new transfer duty exemptions in Queensland. Trustees of self-managed superannuation funds (SMSFs) should be aware that a specific transfer duty exemption will be available retrospectively from 26 October 2011 for the transfer of property between the trustee of the bare trust (Custodian Trustee) and the SMSF trustee, as part of a Limited Recourse Borrowing Arrangement (LRBA).


Background

SMSF trustees taking part in a LRBA are recommended to transfer the acquirable asset from the Custodian Trustee to the SMSF trustee upon the payout of the associated borrowings.

Until now many SMSF trustees in Queensland have sought to obtain a duty exemption for the subsequent transfer by satisfying the Commissioner of State Revenue with written evidence that the SMSF trustee had appointed the Custodian Trustee as “agent” prior to entering into the transaction. The risk of paying double stamp duty was palpable.

What do the amendments mean?

SMSF trustees looking to take advantage of LRBA in Queensland can now take comfort in knowing that a specific transfer duty exemption exists for the transfer of the acquirable asset to the SMSF at the conclusion of the LRBA, provided the requirements of the Superannuation Industry (Supervision) Act 1993 (Cth) and the Duties Act 2001 (Qld) are complied with.

What are the implications for me?

It remains crucial that any proposed LRBA structure is appropriately documented from the outset and that all relevant documentation is retained to assist in claiming the relevant exemptions.

For more information

To discuss the new transfer duty exemptions or for further information on Limited Recourse Borrowing Arrangements please contact us on (07) 3223 6100 or email tax@redchip.com.au.