SMSF- Stamping Bare Trust?

[agent007]

I’d like to check whether it is correct or not that the Bare Trust structure set up to enable borrowing for SMSF needs to be stamped prior to purchase? Failing to stamp Bare trust will result is paying higher stamp duty when loan is finally paid and property transferred to SMSF. Is that true?

Thanks!

 

[Terry_w]

I’d like to check whether it is correct or not that the Bare Trust structure set up to enable borrowing for SMSF needs to be stamped prior to purchase? Failing to stamp Bare trust will result is paying higher stamp duty when loan is finally paid and property transferred to SMSF. Is that true?

Thanks!

Yes, it is a good idea to get done.

When the loan is paid off, in 30 years or thereabouts, the title needs to change with the house transferred from the bare trustee to the SMSF trustee. Since the SMSF trustee is the 'real' owner there would be no stamp duty. But the OSR will not know the relationship between the parties so they may assess the transfer at full duty. This is why it is a good idea to stamp upfront and declare the trust relationship to the OSR.

 

[agent007]

Yes, it is a good idea to get done.

When the loan is paid off, in 30 years or thereabouts, the title needs to change with the house transferred from the bare trustee to the SMSF trustee. Since the SMSF trustee is the 'real' owner there would be no stamp duty. But the OSR will not know the relationship between the parties so they may assess the transfer at full duty. This is why it is a good idea to stamp upfront and declare the trust relationship to the OSR.

Can the trust then be stamped after purchase?

Thanks,
-F

 

[Terry_w]

Can the trust then be stamped after purchase?

Thanks,
-F

It should be possible. Maybe a call to the OSR?

 

[coastymike]

$50 to stamp the warrant trust in NSW

 

[monalisa]

Can the trust then be stamped after purchase?

Thanks,
-F

Hey agent007

Did you end up inquiring this from the OSR?

Thanks
Mona

 

[agent007]

Hey agent007

Did you end up inquiring this from the OSR?

Thanks
Mona

Hi Monalisa,

I contacted OSR NSW- In order to stamp the bare trust the following documents are required:

1- Copy of contract whereby land was acquired
2- Copy of SMSF deed
3- Original bare trust deed
4- Documentary evidence to show SMSF provided purchase funds:
4.1- Bank Statements showing payment of deposit and balance of funds
5- Copy of loan agreement

If ok it will cost $50 and stamping will take a week or so.

Hope this is of help

 

[monalisa]

Hi Monalisa,

I contacted OSR NSW- In order to stamp the bare trust the following documents are required:

1- Copy of contract whereby land was acquired
2- Copy of SMSF deed
3- Original bare trust deed
4- Documentary evidence to show SMSF provided purchase funds:
4.1- Bank Statements showing payment of deposit and balance of funds
5- Copy of loan agreement

If ok it will cost $50 and stamping will take a week or so.

Hope this is of help

Thank you so much! This is very helpful!

I understand you would have gotten the stamping done post the settlement to show the flow of funds etc?

Many thanks
Mona

 

[agent007]

Thank you so much! This is very helpful!

I understand you would have gotten the stamping done post the settlement to show the flow of funds etc?

Many thanks
Mona

I bought a couple of years ago and was never told about stamping the bare trust. It was a recent article I red that prompted me to investigate. I'll collect necessary documentation to submit to NSW OSR for getting the stamping done. I also got property in QLD. Call QLD OSR but the person that took the call wasn't sure about the process neither if it was required or not in QLD. Asked me to provide a letter explaining why I want bare trust to be stamped. Will contact a local solicitor to check if he is aware of what is required up there.

 

[monalisa]

I bought a couple of years ago and was never told about stamping the bare trust. It was a recent article I red that prompted me to investigate. I'll collect necessary documentation to submit to NSW OSR for getting the stamping done. I also got property in QLD. Call QLD OSR but the person that took the call wasn't sure about the process neither if it was required or not in QLD. Asked me to provide a letter explaining why I want bare trust to be stamped. Will contact a local solicitor to check if he is aware of what is required up there.

We are hoping to purchase in QLD. I will look into.

Thanks for your help!

 

[jorgon]

I think you should be guided by your conveyancing solicitor on this issue, since the requirements and the practice will differ depending on which State or Territory the transaction takes place.

 

[myotherac]

Hi Monalisa,

I contacted OSR NSW- In order to stamp the bare trust the following documents are required:

1- Copy of contract whereby land was acquired
2- Copy of SMSF deed
3- Original bare trust deed
4- Documentary evidence to show SMSF provided purchase funds:
4.1- Bank Statements showing payment of deposit and balance of funds
5- Copy of loan agreement

If ok it will cost $50 and stamping will take a week or so.

Hope this is of help

Has anyone in NSW stamped their bare trust recently?

On my first SMSF property purchase, I had a city law firm stamp my bare trust and also stamp an non-dated transfer of land document (01T). It was $50 for each ($100 in total) and they charged me $1,820 as their fee. The service was not exceptional. The job was done but it took them 3 months and they were not quick to reply to phone calls or emails from me. Worst of all, I sent them my original SMSF trust deed, which they didn't need but which they lost.

I just purchased another SMSF property and I am thinking of organising the bare trust and transfer of land to be stamped on my own. I have the previous statutory declaration and can generate the 01T transfer of land form from the LPI website. I would just substitute the names of the new bare trust, bare trustee, SMSF fund, SMSF trustee and property address.

Has anyone done this on their own?

I called the OSR and they have told me the cost has gone up from $50 to $500 (ten fold increase) to have the bare trust stamped. They now quote 3 weeks for the stamping process.

I presume the cost to the 01T transfer form stamped is also $500 now?

Looking on Google, apparently this increased cost is part of the State Revenue Legislation Further Amendment Bill 2014.

 

[Terry_w]

Has anyone in NSW stamped their bare trust recently?

On my first SMSF property purchase, I had a city law firm stamp my bare trust and also stamp an non-dated transfer of land document (01T). It was $50 for each ($100 in total) and they charged me $1,820 as their fee. The service was not exceptional. The job was done but it took them 3 months and they were not quick to reply to phone calls or emails from me. Worst of all, I sent them my original SMSF trust deed, which they didn't need but which they lost.

I just purchased another SMSF property and I am thinking of organising the bare trust and transfer of land to be stamped on my own. I have the previous statutory declaration and can generate the 01T transfer of land form from the LPI website. I would just substitute the names of the new bare trust, bare trustee, SMSF fund, SMSF trustee and property address.

Has anyone done this on their own?

I called the OSR and they have told me the cost has gone up from $50 to $500 (ten fold increase) to have the bare trust stamped. They now quote 3 weeks for the stamping process.

I presume the cost to the 01T transfer form stamped is also $500 now?

Looking on Google, apparently this increased cost is part of the State Revenue Legislation Further Amendment Bill 2014.

I have done one a few months ago. OSR also told me the duty was $500 but it is (or was) just $50. I am a lawyer and did this without charge for my client, but it would be easy to do yourself.

 

[myotherac]

I have done one a few months ago. OSR also told me the duty was $500 but it is (or was) just $50. I am a lawyer and did this without charge for my client, but it would be easy to do yourself.

Thanks Terry. I am not a lawyer (medical) but I reckon I could give it a go having been through it before. I read somewhere that it needs to be done within 3 months of the purchase but the city law firm says that there is no deadline.

Can I ask politely when was the last one you stamped, because I want to work out whether the fee has increased?

From this website, the bill was passed by Parliament on October 14, 2014 and assented on October 23, 2014:

http://www.maddocks.com.au/reading-room/a/nsw-stamp-duty-possible-changes-for-smsfs-in-2014

http://www.legislation.nsw.gov.au/bills/docref/7d31ac5e-73d2-4574-8007-cabea39ec4ce

The particular section is section 62B.

Could I also ask do you routinely stamp the 01T transfer form (undated) for transfer of the property from the custodian trustee to the SMSF trustee now?

 

[Terry_w]

Thanks Terry. I am not a lawyer (medical) but I reckon I could give it a go having been through it before. I read somewhere that it needs to be done within 3 months of the purchase but the city law firm says that there is no deadline.

Can I ask politely when was the last one you stamped, because I want to work out whether the fee has increased?

From this website, the bill was passed by Parliament on October 14, 2014 and assented on October 23, 2014:

http://www.maddocks.com.au/reading-room/a/nsw-stamp-duty-possible-changes-for-smsfs-in-2014

http://www.legislation.nsw.gov.au/bills/docref/7d31ac5e-73d2-4574-8007-cabea39ec4ce

The particular section is section 62B.

Could I also ask do you routinely stamp the 01T transfer form (undated) for transfer of the property from the custodian trustee to the SMSF trustee now?

The last one I did was about 6 months ago. I don't get the transfer stamped upfront. Should be easy neough to do if you have done one previously which you can model on.

 

[myotherac]

My 2nd SMSF purchase doesn't settle until Feb 2015, and I'll need to wait a month or two to get the statments to prove the SMSF is paying the loan, so I won't be in a position to stamp until about April 2015. I'll give it a go then.

Personally I think stamping the land transfer form upfront is also a good idea.That way the stamp duty is paid upfront, and the government can't change the rules or cost. It's gone up from $50 to $500, and who knows what it'll be in the future. I got the land transfer form for my first purchase upfront and I'm glad that is another thing out of the way and no need to worry about. The city law firm told me that they had to fight to have the land transfer form stamped upfront as they had to argue to the OSR that there was nothing in the regulations that prevented them having it stamped before the loan has been repaid.

 

[Terry_w]

Yes good point about the transfer - fees tend to only go up.

 

[Paul@PFI]

Stamping the bare trust deed is very easy provided you are patient or have a free half day. It can be done over the counter in Parramatta or by mail. Its very easy if you send all the relevant docs.

They are very diligent as it is very easy to run a transfer duty scheme under the guise of a bare trust for a SMSF. They must be satisfied its a SMSF bare trust.

There is also a technical issue where a commercial property (resi is prohibited) is transferred inspecie to a SMSF. The OSR will want to ensure that the same members benefit from the inspecie acquisition as the former ownership. In such a case I strongly recommend that clients seek the involvement of their solicitor as the duty can be significant if a mistake occurs.

Tip : When transferring a property from Trust A to Trust B (many states) and the same trustee is involved the OSR may refuse to stamp the transfer arguing that there is no change of legal owner. However all they do is stamp it with 0.00 duty ($20 in practice) when you push the point. This evidence of stamping can be vital later.

 

[myotherac]

Stamping the bare trust deed is very easy provided you are patient or have a free half day. It can be done over the counter in Parramatta or by mail. Its very easy if you send all the relevant docs.

Tip : When transferring a property from Trust A to Trust B (many states) and the same trustee is involved the OSR may refuse to stamp the transfer arguing that there is no change of legal owner. However all they do is stamp it with 0.00 duty ($20 in practice) when you push the point. This evidence of stamping can be vital later.

Thanks Paul and Terry

I normally have a free weekday off each fortnight so I will go personally to the Parramatta office with my documents and bank cheque when the time comes. Why does it take a half day? Does an OSR lawyer go through all the documents and you wait for them?

The bare trustee and smsf trustee are different companies so I don't think I'll need to argue the second point.

 

[Terry_w]

Thanks Paul and Terry

I normally have a free weekday off each fortnight so I will go personally to the Parramatta office with my documents and bank cheque when the time comes. Why does it take a half day? Does an OSR lawyer go through all the documents and you wait for them?

The bare trustee and smsf trustee are different companies so I don't think I'll need to argue the second point.

Not a lawyer, but a public servant. I have never done it over the counter, but they would have to check the documents and be sure there is a trust relationship in place. They may not even be able to stamp on the spot so best to give them a call beforehand and find out - the stamping person will probably be on a RDO.