Family trust exemption (s. 118) toolkit
This toolkit brings together everything you need to know about self assessing trust acquisitions or surrenders in family trusts.
Under section 118 of the Duties Act 2001, a family trust acquisition or surrender is exempt where the:
- family trust is a discretionary trust
- person acquiring or surrendering a trust interest is a family member or family company
- person acquiring or surrendering a trust interest does not benefit in the capacity of trustee.
The exemption also applies to trust acquisitions and surrenders in a family trust:
- due to the birth or death of a family member
- when a person joins or ceases to belong to a class of beneficiaries made up of the children, stepchildren or grandchildren of a named family member.
A family trust is one that is established and maintained primarily for the benefit of the members of a particular family or family company. For non-discretionary trusts, at least 90% of the trust interests must be held by members of the family or a family company.
A family company is one in which all directors and shareholders are members of a particular family.
If you are a registered self assessor and intend to apply this exemption to a transaction, you must self assess it in OSRconnect.
Assessing a family trust exemption
Use the section 118 interactive help to determine if you should apply a family trust exemption to a transaction.
Follow our step-by-step procedure on how to apply this exemption in OSRconnect.
Records you need to keep
For this type of transaction, you must keep:
- copies of the documents, including a copy of the original family trust deed and any subsequent amending deeds
- financial statements for the trust and any associated entities
- a completed dutiable transaction statement (Form D2.2).
Find out more about your record keeping obligations.
- Read about trust acquisitions and surrenders.
- Read section 118(6) of the Duties Act for the definition of who is a family member.
- Refer to Schedule 6 of the Duties Act for the definition of ‘family trust’.
- Read the transfer duty rates or use the transfer duty calculator to work out a duty liability.
- Get help using OSRconnect.
- View the list of approved transactions for self assessors.
- Last reviewed: 12 Mar 2020
- Last updated: 10 Nov 2016
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