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Jean Rey

Nov 22, 2021

Stamp Duty on Bare Trust

in SMSF Technical Forum

Hi SMSFAAA team,

I am sorry in advance if you feel this question is not relevant but I am struggling understanding when a bare trust deed needs to be stamped.

1. Does it depend on where the purchased property is located or on where the trust deed was established? In other words, does a fund established in NSW and purchasing a property in QLD needs to have the bare trust deed stamped?

2. If a bare trust deed was not stamped when the property was purchased, can we just get the trustee to get the bare trust stamped asap before finalising the audit? Would it be sufficient to pass the audit?

From my understanding , the trust deed does not need to be stamped to be valid it just needs to be stamped if the SMSF wants to transfer the property (eg sell) or change the trustee.

Please let me know at your earliest convenience.

Yours Sincerely

Jean Rey

4 answers0 replies

Comments (4)

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Jean Rey

Nov 23, 2021

Thank you for your precious help.

THE AUDITORS INSTITUTE

Nov 23, 2021

Hi Jean

Thanks, I agree with Kate Drummond that the non stamping of the deed does not make it invalid and therefore this is not a breach of the SIS Act re section 67 & section 67A.

Thanks

SMSF AAA

Jean Rey

Nov 23, 2021

Hi SMSFAAA team,

Thank you very much for your answer, I really appreciate.

I use an auditing software that states that when a trust deed has not been stamped, it indicates that the trust is invalid, and the asset purchased is not held on trust. Consequently, the borrowing does not meet the requirements of s67A of the SISA and s67 of the SISA has been breached."

Kate Drummond has a total different opinion and I tend to agree with her. Since the trust deed is valid, the asset purchased is held on trust. What do you think about the statement regarding section s67 of the SISA being breached?

Please let me know.

Yours Sincerely

Jean Rey

THE AUDITORS INSTITUTE

Nov 22, 2021

Hi Jean

Thanks, yes more of a legal question rather than an audit question.

The question was raised with Kate Drummond a Senior Lawyer at Moores, a legal firm in Hawthorn, Melbourne. Her response was:

"I confirm that stamping is not a validity issue, but rather a duty issue – the trust deed is valid whether or not it is stamped. I therefore would not expect there to be any issue with auditing.

Whether the bare trust deed needs to be stamped depends on the duties law requirements of the jurisdiction where the property is located (ie. it doesn’t matter where the fund itself is headquartered for these purposes).

Different jurisdictions in Australia vary as to whether stamping is required for a bare trust deed. In Victoria, currently SRO policy is that a bare trust deed should be stamped, and stamping also simplifies the process of getting the property from the custodian trustee to the SMSF trustee at the conclusion of the LRBA."

Thanks

SMSF AAA