Qld: new stamp duty ruling
I had previously blogged that the Queensland Office of State Revenue was going to issue a new ruling about stamp duty exemptions. This was important, as there was confusion about when the Office of Stamp Revenue would charge duty on family law transactions.
Thankfully, the Office of State Revenue has now released its ruling. This Brisbane family lawyer for one is very happy that transactions entered into pursuant to orders are now exempt, whether they are only from husband to wife or between related entities, or even unrelated entities. What is important is that the transfer is pursuant to the order.
Here is the ruling:
PRACTICE DIRECTION
DUTIES ACT – 45.3
APPLICATION OF SECTION 90(1)(a) OF THE
FAMILY LAW ACT 1975 (CTH) TO INSTRUMENTS
EXECUTED IN ACCORDANCE WITH CONSENT ORDERS
Practice Direction History
Practice Direction Issued Dates of effect
From To
Issued Effective From To
DA 45.1 1 March 2002 1 March 2002 22 June 2008
DA 45.2 23 June 2008 23 June 2008 23 June 2008
DA 45.3 23 June 2008 23 June 2008 Current
Background
A. This Practice Direction should be read in conjunction with Revenue Ruling Duties Act 29 –
Exemption under Family Law Act 1975 (Cth) and the Application of Chapter 10 Part 3 of the
Duties Act 2001.
B. Section 90(1)(a) of the Family Law Act 1975 (Cth) (“the Family Law Act”) provides that
certain agreements, deeds and other instruments are exempt from duty in certain
circumstances. The exempted instruments are those brought into existence and executed for the purposes of, or in accordance with, an order made under Part VIII of the Family Law Act.
C. Part VIII of the Family Law Act relates to certain property, spousal maintenance and maintenance agreements.
D. Section 80 of the Family Law Act denotes the general powers of the Family Law Courts in relation to Part VIII. One such power is the power to make an order by consent of the parties to the proceedings (“a consent order”).
E. This Practice Direction sets out the Commissioner’s views in relation to the application of s.90(1)(a) of the Family Law Act to transfers of dutiable property where the transfers are executed for the purposes of, or in accordance with, a consent order made under Part VIII of the Family Law Act.
Practice Direction
1. The important element in determining whether the exemption under s.90(1)(a) of the Family Law Act applies is whether the instrument is executed for the purposes of, or in accordance with, an order made under Part VIII of the Family Law Act.
2. Where the order is made under Part VIII of the Family Law Act, the identity of the transferor and the transferee is not relevant.
Example 1
A husband and wife own an investment property. Consent orders were made in the Federal Magistrates Court of Australia under Part VIII of the Family Law Act in respect of a property settlement between the husband and the wife.
Under the terms of the consent order the Court orders the wife to transfer her share of the property to the husband’s trustee company.
The instrument transferring the wife’s interest in the property is exempt from duty under s.90(1)(a) of the Family Law Act.
Example 2
A husband and wife are the directors and shareholders of X Pty Ltd. Consent orders were made in the Family Court of Australia under Part VIII of the Family Law Act in respect of a property settlement between the husband and the wife.
Under the terms of the consent order the Court orders the parties to do all such acts and things and sign all such documents and give all directions that may be necessary to enable X Pty Ltd to transfer all of its right, title and interest in a certain property to the wife. The instrument transferring that property from X Pty Ltd to the wife is exempt from duty
under s.90(1)(a) of the Family Law Act.
Example 3
A property is owned by a husband and his business partner. Consent orders were made in the Family Court of Australia under Part VIII of the Family Law Act in respect of a property settlement between the husband and the wife. Under the terms of the consent orders the Court orders the husband and his business partner to transfer a particular property to the wife. The instrument transferring that property from the husband and his business partner to the wife is exempt from duty under s.90(1)(a) of the Family Law Act.
3. Examples of circumstances where an instrument cannot be said to be executed for the purposes of, or in accordance with, an order made under Part VIII of the Family Law Act include, but are not limited to, where:
(a) an instrument is executed prior to the making of an order and the instrument is not held in escrow pending the making of the order; or
(b) an instrument is executed which evidences a particular transaction not specifically referred to in the order.
2 Refer to Practice Direction Duties Act 29 – Transfers held in escrow and the exemptions relating to the Family Law Act 1975 (Cth) and the Property Law Act 1974.
Example 4
Y Pty Ltd as trustee for the Y Family Trust owns a property in Queensland. The husband and
wife are the shareholders and directors of Y Pty Ltd and are beneficiaries of Y Family Trust.
The husband and wife agree to a property settlement which included the transfer of the
property to the wife. A draft consent order is then lodged with the Federal Magistrates Court
of Australia.
Before the consent order is pronounced by the Court, a transfer is executed transferring the
property to the wife. The transfer is not held in escrow pending the Court pronouncing the
order.
The instrument transferring the property to the wife is not exempt from duty under s.90(1)(a)
of the Family Law Act as the instrument was executed prior to the pronouncement of the
order by the Court. Therefore, the transfer was not executed for the purposes of, or in
accordance with, an order made under Part VIII of the Family Law Act.
Example 5
A property is owned by a wife and her business partner. Consent orders were made in the
Federal Magistrates Court of Australia under Part VIII of the Family Law Act in respect of a
property settlement between the husband and the wife.
Under the terms of the consent order the Court orders the wife to pay the husband a lump
sum of $100 000. In order to raise the money the wife transfers her interest in the property to
her business partner.
The instrument transferring the wife’s interest in the property to her business partner is not
exempt under s.90(1)(a) of the Family Law Act as the order does not require the transfer of
the wife’s interest in the property. Therefore, the instrument cannot be said to be executed for
the purposes of, or in accordance with, an order made under Part VIII of the Family Law Act.
Date of Effect
4. This Practice Direction takes effect from 23 June 2008.
David Smith
Commissioner of State Revenue
22 August 2008
