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 from transfer duty 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 (discretionary or non-discretionary):

  • due to the birth or death of a family member
  • or
  • 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 OSR Online.

Assessing a family trust exemption

Use the section 118 interactive help to determine if you should apply a family trust exemption to a transaction.

How to lodge online

You must complete all mandatory data fields under each tab in OSR Online. Mandatory fields are marked with a red asterisk. There are some specific data requirements.

  • Select Transfer - other than land as the Transaction Class.
  • Select Trust acquisition or trust surrender as the Type of dutiable transaction.
  • Select Trust - dutiable property as the Type of dutiable property.
  • Enter a detailed description of the transaction.
  • Answer Yes to the question: Is the consideration for this transaction less than the unencumbered value of the property included in this transaction?
  • Enter the unencumbered value of 100% interest in property if known; if unknown, enter $0.00 (nil).
  • Answer Yes to the question: Is an exemption being claimed?
  • Select s.118 exemption trust acq/surr in family trust from the Exemption type drop-down list.

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.

Also consider...

Contact

Office of State Revenue
For transfer duty self assessment queries:

For queries on payroll tax, land tax and royalties:

  • call 1300 300 734 (Australia) or +61 7 3179 2500 (overseas)
  • send an email using our online enquiry form.