25/07/2012

Currently it appears there are a number of States which offer concessional duty on transfers of business real property from a member into their SMSF including  NSW, WA and VIC.  Each of the States have variations on their requirements which are summarised below.

NSW   
S.62A of the NSW Duties Act allows for concessional duty of $50 when the transfer has no borrowing, and $500 when borrowed funds are used for the acquisition. 

Acquisition can be 100% purchase or part purchase and part in-specie contribution (with the option of using borrowed funds for the purchase). 

The transferor of the property must be the only member of the fund or the property must be held solely for the benefit of the member and solely for the purpose of providing retirement benefits to the member.

The property cannot be pooled with property held for another member of the fund.

No other member of the fund can obtain an interest in the property or any later proceeds of sale of the property.

If the acquisition of property is 100% contribution then a Transfer document may be used. However, if it is a purchase, then a Contract for Sale and a Transfer should be used in order to satisfy s109 of the SIS Act, which requires the parties to deal with each other at arm’s length.

WA
S.122 of the WA Duties Act allows for nominal duty of $20 to be charged on a transfer of property from the member to the SMSF Trustee.

There must be consideration for the transfer so in-specie contributions do not apply.

The transferor of the property must be the only member of the fund or the property must be held solely for the benefit of the member and solely for the purpose of providing retirement benefits to the member.

The property cannot be pooled with contributions or other assets of another member of the fund.

No other member of the fund can obtain an interest in the property.

This provision of the WA Act only provides for the transfer to an SMSF Trustee, so for transactions which involve borrowing and the transfer to a Custodian we invite you to contact us for further information on the options available in the WA jurisdiction.

VIC
S.41 of the Duties Act in VIC provides that transfer duty is not imposed on a dutiable transaction that is a transfer of property from a member in a superannuation fund to the SMSF Trustee. 

In VIC no monetary consideration can pass from the SMSF Trustee to the member as vendor, so the only option available is for the member to contribute the property by making an in specie contribution to the SMSF on the member’s behalf.

Townsends have a specialised suite of documents prepared to meet the requirements of each jurisdiction.

If you have any questions in regard to this article, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.