Trust interest, acquisitions and surrenders

Learn how transfer (stamp) duty applies to an acquisition or surrender of a trust interest. Discover what documents you need to lodge.

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Trust interest

Your interest in a trust as a beneficiary is the percentage of the value of your entitlement under the trust. There are special rules for discretionary trusts and for trusts subject to prior life interests or contingencies.

For discretionary trusts, only takers in default of an appointment by the trustee (i.e. people whose entitlements as beneficiaries result from the trustee not exercising their discretion) have a trust interest.

Dutiable value

The dutiable value of your trust interest is the higher of the consideration paid for the trust interest (relating only to dutiable property) or an amount worked out by applying the percentage of the trust interest to:

the unencumbered value

Unencumbered value

Transfer duty

The value of the property being transferred disregarding any encumbrance; for example, money owed under a mortgage.

See section 14 of the Duties Act 2001 for a full definition.

of the dutiable property
Dutiable property

Property that is involved in a dutiable transaction in Queensland.

When you buy or sell dutiable property, you’re likely to pay duty. This can include:

land in Queensland

a transferable site area

an existing right

a Queensland business asset

a chattel in Queensland.

Read section 10 of the Duties Act 2001 for more on property types.
the trust holds
any indirect interest
Indirect interest

For partnerships, an interest held in dutiable property if:

through a partnership interest or trust interest, there is a connection between the partnership and dutiable property of the other partnership or trust

through a series of partnership interests or trust interests, or a combination of these, there is a connection between the partnership and dutiable property of a partnership or trust in the series.

For trusts, an interest held in dutiable property if:

through a trust interest or partnership interest, there is a connection between the trust and dutiable property of the other trust or partnership

through a series of trust interests or partnership interests, or a combination of these, there is a connection between the trust and dutiable property of a trust or partnership in the series.

For corporate trustees, an interest held in dutiable property if:

the corporate trustee has a partnership interest or trust interest in an ultimate entity

through a series of partnership interests or trust interests, or a combination of these, there is a connection between the corporate trustee and dutiable property of a partnership or trust in the series.
in dutiable property the trust holds.

When your trust interest increases, duty is charged on the increase only.

See sections 49–84 of the Duties Act 2001 for more information.

Acquisitions and surrenders

A trust acquisition occurs when you obtain a trust interest. This happens when you:

purchase units in a unit trust
increase your trust interest
become a ‘taker in default’ as a beneficiary in a discretionary trust.

A trust surrender occurs when you surrender a trust interest—that is, you give up your beneficial interest in the trust, which increases the interests of the remaining beneficiaries in the trust.

Duty is calculated on the dutiable value of the trust interest acquired or surrendered.

You may be eligible for an exemption on acquisitions or surrenders in family trusts and superannuation funds .

Transferring property to or from a trust is neither a trust acquisition or surrender. Depending on the circumstances, this could be a transfer, trust creation or termination.

The XYZ Unit Trust operates a business in Queensland. The business assets have a dutiable value of $2,400,000. There are 12 units in the trust, with 4 unit holders each holding 3 units.

A member of the trust surrenders their units. This leaves 9 units in the trust with 3 unit holders each with 3 units. The remaining beneficiaries’ interests in the property owned by the trust have increased.

As such, a trust surrender has occurred and transfer duty is payable.

The surrendered units make up a 25% trust interest. They have a dutiable value of $600,000 and duty must be paid on this amount.

The Land Unit Trust holds land with a value of $1,000,000 in Queensland. There are 10 units in the trust, with 5 beneficiaries each holding 2 units.

One of the beneficiaries wants to sell their 2 units. The units are sold to Christine for $150,000.

The dutiable value of the trust interest is the higher of:

the consideration paid ($150,000)
the amount calculated by applying the percentage of Christine’s trust interest (20%) to the unencumbered value of the dutiable property the trust holds ($1,000,000)—$200,000.

In this case, Christine must pay duty on $200,000 for her trust acquisition.

Lodging documents

For a transfer, surrender or acquisition of an interest in a unit trust, you need to lodge:

the unit transfer form and agreement to transfer the units
details of the unit holders and their holdings immediately prior to the transaction
a dutiable transaction statement (Form D2.2)
a certified statement of the assets and liabilities of the trust
evidence of value of the assets of the trust (including goodwill) supported by financial statements for the previous 3 years
a copy of the trust deed and any variations to the trust deed
a covering letter outlining the documents you have lodged, your name and return address.

For a transfer, surrender or acquisition in relation to discretionary trusts (for example, family trusts), you need to lodge:

the documents that provide for the transfer, surrender or acquisition
details of the beneficiaries and their entitlements under the trust (before and after the transaction), including full details of any default beneficiaries
a dutiable transaction statement (Form D2.2)
a certified statement of the assets and liabilities of the trust
evidence of value of the assets of the trust (including goodwill) supported by financial statements for the previous 3 years
a copy of the trust deed and any variations to the trust deed
a covering letter outlining the documents you have lodged, your name and return address.

Read more about lodging and stamping documents.

Also consider…

Understand when duty applies to trust transactions.

Last updated: 16 October 2024