Dutiable property requires extra care in super splitting process
A law firm has outlined tips for simplifying the stamp duty exemption process for SMSF couples going through a separation.
Speaking in a recent webinar, DBA Lawyers senior associate William Fettes said where SMSF professionals are assisting clients with family law super splits, extra case needs to be taken if the SMSF holds dutiable property or an interest in a land holding entity.
Mr Fettes said ideally duty advice and property law advice should be obtained in the relevant jurisdiction to ensure there are no surprises or adverse duty outcomes.
“Even with very basic things such as the need for the remaining member in the fund to change the trustee — it's important to get that right,” said Mr Fettes.
Where there has been a decision to shift from individual trustees to a corporate trustee, it's important clients think about they want to handle the stamp duty exemption in relation to that.
“A straightforward way of doing it may be to change the trustee of the fund up front to a corporate trustee and get that done and then have all the State Revenue Office paperwork done before you proceed with all the splitting rigmarole,” Mr Fettes suggested.
Mr Fettes explained that applying for a steep duty exemption under a change of trustee where there is no change in membership is typically easier than seeking an exemption under relationship breakdown provisions.
“One you start to complicate it with changing members or you have to look at the relationship breakdown provisions, it does get more complex,” he said.
“So sometimes it's advisable to address this up front to avoid additional complexity.”
SMSF clients in this situation should also be mindful of the foreign resident CGT withholding regime.
“A clearance certificate may need to be obtained prior to any transfer,” he said.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
