Corporate trustee duty

If you acquire shares in a corporation that holds property on trust, you may have to pay corporate trustee duty.

A corporate trustee is one of the following:

• an unlisted corporation that holds dutiable property on trust for a discretionary trust
• an unlisted corporation that holds shares in the trustee of a discretionary trust
• an unlisted corporation that has an indirect interest in dutiable property that is held on trust for the discretionary trust.

The corporation does not have to be a Queensland corporation.

Corporate trustee duty is calculated using the transfer duty rate when you make a relevant acquisition.

Relevant acquisitions

You make a relevant acquisition if:

• you acquire a share interest in a corporate trustee, or a corporation that has an interest in the corporate trustee
  and
• the acquisition is part of an arrangement under which a person obtains, directly or indirectly, a benefit relating to the property that the corporate trustee holds on trust.

In some cases, there does not need to be a purchase of shares.

See sections 205 to 229 of the Duties Act 2001 for more information.

Read more about lodging documents for assessment.

Business assets in other states

If the discretionary trust holds assets that are used in a business conducted in multiple states, we apportion the dutiable value between the states.

See sections 218 to 219 of the Duties Act for more information.

Additional foreign acquirer duty for corporate trustees

Additional foreign acquirer duty (AFAD) is payable on your relevant acquisition if:

• you are an acquirer for the purposes of the relevant acquisition and a foreign person
• the relevant acquisition is liable for corporate trustee duty
• the corporate trustee holds dutiable property on trust, or has an indirect interest in dutiable property held on trust, that includes AFAD residential land
• the liability for your acquisition arises on or after 1 October 2016.

AFAD is calculated at 7% of the dutiable value of the relevant acquisition, when based on the dutiable value of the AFAD residential land held directly and indirectly on trust and to the extent of the foreign person’s interest in the relevant acquisition.

Reassessment of additional foreign acquirer duty

If AFAD is not imposed on a relevant acquisition, the acquisition must be reassessed to impose AFAD if both the following conditions apply:

• AFAD was not imposed because the acquirer was not a foreign corporation or a foreign trust.
• The acquirer becomes a foreign corporation or foreign trust within 3 years after the duty liability arises on the relevant acquisition.

Exemptions

You do not pay corporate trustee duty if the acquisition is:

• solely to give effect to a change of trustee
• made by a family member or family company that does not hold the shares as trustee, and the relevant trust was established primarily to benefit members of a particular family
• represented by a dutiable transaction for which an exemption is allowed under sections 123 to 126 of the Duties Act.

You must lodge a corporate trustee duty statement (Form D3.2) to claim these exemptions.

Lodging the documents

You need to lodge the following with Queensland Revenue Office within 30 days of making a relevant acquisition:

• a corporate trustee duty statement (Form D3.2)
• the share transfer form
• a copy of the trust deed
• a covering letter outlining the documents you have lodged, your name and return address.

If an exemption has not been claimed, you must include a:

• valuation of the shares in the company supported by financial statements for the previous 3 years
• valuation of the assets of the trust (including goodwill) supported by financial statements for the previous 3 years.

Also consider…

• Read the public ruling on property held on trust by a corporate trustee (DA207.1)
• See sections 205 to 229 of the Duties Act 2001.
• Read about exempt transactions involving trusts.
• Find out about additional foreign acquirer duty for landholder duty.
• See previous transfer duty rates.