Family trust exemption (s.118) toolkit

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 QRO 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 QRO 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…

• See the data entry standards for QRO Online.
• 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 with QRO Online.
• View the list of approved transactions for self assessors.