Stamping of Trust Deed

[NickD]

Hi All,

I am aware that a Trust Deed needs to be stamped in the State that the Trust is to operate. But from reading previous threads that doesn't seem to be the case in QLD.

Other than having the Trust signed in QLD by the Settlor and other parties, is there any thing else required to "activate" the trust? Apart from ABN and Bank account.

Also the following link reinforces my thought: http://www.osr.qld.gov.au/practdir/duties/PDDA061-1.pdf

It just doesn't seem official if some govt. agency hasn't seen it!

According to Dale's "Trust Magic" stamping is done so the relevent State Govt can collect stamp duty etc. How does Qld do this?

Thanks in advance.

Nick

 

[Mry]

I am aware that a Trust Deed needs to be stamped in the State that the Trust is to operate. But from reading previous threads that doesn't seem to be the case in QLD.

Other than having the Trust signed in QLD by the Settlor and other parties, is there any thing else required to "activate" the trust? Apart from ABN and Bank account.

Also the following link reinforces my thought: http://www.osr.qld.gov.au/practdir/duties/PDDA061-1.pdf

It just doesn't seem official if some govt. agency hasn't seen it!

According to Dale's "Trust Magic" stamping is done so the relevent State Govt can collect stamp duty etc. How does Qld do this?

Thanks in advance.

Nick

The trust is actually activated as soon as the settlor contributes the settled sum.

If your trust is "activated" after the 1st of March 2002, you do not need to have them stamped according to the Office of State Revenue but I have been advised by a lawyer that a trust has no legal effect unless it is stamped. I don't know which to believe to be honest.

If you do want it stamped by OSR despite what they say, it will cost $25.60 in adjudication fees plus $3.55 in postage and $1 for each additional deed if you send more than 1.

However, what most people don't realise is that if you amend the trust deed, you will be required to have that stamped.

I'd ask a lawyer if you have one.

 

[austini]

Hi,

"If your trust is "activated" after the 1st of March 2002, you do not need to have them stamped according to the Office of State Revenue but I have been advised by a lawyer that a trust has no legal effect unless it is stamped."

If this is the case then there must be an ever increasing number of worthless trust deeds floating around QLD.

When I had my trust created in QLD earlier this year I even rang the OSR to clarify this. They told me that it is frustrating that new deeds are still being sent to them for stamping. In all cases unless specifically requested the OSR will return them unstamped with a letter detailing the reasons why (ie reference to the Duties Act etc). They are absolutely adamant that stamping is not required.

Should any future legal complications arise then surely the OSR would have to be held responsible to a substantial degree.

However with the much higher possibility of legislative risk and the ongoing negative comments and confusion I see in the press and elsewhere about trusts I sometimes feel more nervous than when I held assets in my own name!

Cheers - Gordon

 

[Mry]

If this is the case then there must be an ever increasing number of worthless trust deeds floating around QLD.

When I had my trust created in QLD earlier this year I even rang the OSR to clarify this. They told me that it is frustrating that new deeds are still being sent to them for stamping. In all cases unless specifically requested the OSR will return them unstamped with a letter detailing the reasons why (ie reference to the Duties Act etc). They are absolutely adamant that stamping is not required.

It also makes it more confusing in that OSR do not give legal advice so they can't say whether or not that is the case.

My personal opinion is they are of legal authority because the titles office accepts unstamped deeds and banks do as well. But then again, you can't rely on my advice. Call up the Queensland Law Society and see if they can help you further.

 

[Beach Bum]

Trust don't have to be stamped to be valid.
The "stamping" comes in handy though, as the trust is verifiable by an indipendent third party.
You can't basicaly backdate the documents and say you had it for years.

disclaimer
as is my understanding and my opinion not advice, ask a lawyer.

 

[capitalist]

I am aware that a Trust Deed needs to be stamped in the State that the Trust is to operate. But from reading previous threads that doesn't seem to be the case in QLD.Nick

Not sure about this as my accountant specifically asked where i was buying (QLD) so that he could send it up to be stamped in QLD.

 

[DaleGG]

Hi

We still send trust deeds to the OSR in Qld even though we know that there is no stamp duty to be paid, and, that they will send them back with a letter.

So, why do we do it?

One reason is in case the Qld government change the laws and then require the deeds to be stamped;
Another is that we then have proof of the deeds being acknowledged by the OSR which we find is helpful when some banks still ignorantly demand stamped copies of trust deeds.
Lastly, it protects everyone's bum.


At this stage, we intend to continue doing so.
Cheers

Dale

 

[NickD]

Thanks for all your replies.

My solicitor (NSW) said the same as what austini and Mry say about not requiring stamping. But I do like Dale's idea of sending it anyway. I don't think I will need to amend the Deed so this shouldn't be an issue. I will give the Law Society a call anyway and see what they have to say.

Cheers,
Nick

 

[PrimeCommercial]

Nothing like digging up an old thread.......

I'm on my way to the OSR this morning as my solicitor and the company he uses to setup entities told me they need stamping. On further investigation all the 'incorporation' companies offer the trust deeds for a fee and also offer OSR stamping for the $500odd dollars. I was told that the Unit trust needs to be stamped but the two family trusts do not!

After Googling this I found very little information and nothing from a government website confirming the process. I guess I'll find out this morning when I rock up at the OSR office in Parramatta.

 

[Terry_w]

There are some inaccuracies above.

In NSW a deed needs to be stamped and duty paid if the deed is executed in NSW. This applies to any trust deed except SMSFs and testamentary trusts. fee is $500 and it needs to be stamped within 30 days of execution.

 

[Redwood]

For SMSFs at least, trust deeds do not need to be stamped. The thread was started in 2004....

 

[PrimeCommercial]

Thanks Terry, Spot on as usual.

Easy enough to complete and didn't have to jump though hoops. They don't accept c/c which meant a trip to the bank, after returning with the correct amount they then said that'll be another $45.27 late fee for stamping almost 12 months after the documents were executed....another trip to the bank.....

Also found out (contrary to what my accountant said) that the family trust will also need to be stamped. Another trip to the OSR

 

[Paul@PFI]

I don't think I will need to amend the Deed so this shouldn't be an issue.

In QLD there can be some serious and nasty outcomes if a trust deed is amended where trust owns real property. QLD might not charge a lot to stamp a deed but if you amend the deed they can impose full transfer duty to the property !! See QLD Duties Act (Part 8) has a tight "indirect" law relating to trusts. Changing the appointor or change a beneficiary and it can be an expensive error.

You do know why a deed needs to be stamped ? And it is NOT for the duty. I'm regularly horried to hear peple who dont know this answer. Its a warning sign they didnt get structure and legal advice. What other bits did you miss ??

Answer : Courts wont hear a case concerning the trust if the deed isnt stamped and trust or duties law says it should be. This can cause all sorts of issues. Lets says a NSW client buys QLD prop using a trust and asks an accountant to setup trust. He sets up in QLD. But there is no stamping. Yet jurisdiction could fall in NSW. Pays to get legal advice.

Also to address many posters who mentioned a trust being "activated". A trust requires several elements to exist. Trust property. Beneficiaries and terms of the trust (ie deed) are key....This legal principle explains why a SMSF doesnt "exist" just because it has a deed. There needs to be a bank account too...ie Trust property. So theory says that until the signed deed and trust property (ie settled sum etc) exist then there isnt a trust. This simple matter has been thrown at many taxpayers and AAT have found that no trust existed becuase a step was overlooked.