Issue

How to treat partial segregation for property stamp duty in Class?

Background

The Office of State Revenue of NSW (OSR) requires that a fund's trust deed contains an irrevocable clause that the property is segregated for the member’s benefit only.  The requirement to have the relevant clause included in the fund’s deed is to isolate the property of the transferor/member from current fund members or others who become members in the future after the transfer of the property has taken place.

 

The standard trust deed usually does not contain the required irrevocable clause. As such, a Deed of Variation would need to be prepared to allow for this.

 

For accounting purposes, it would be prudent to segregate all assets of the fund to reinforce that the fund is complying with the OSR requirements and its trust deed.  

 

Currently, there are some limitations of partial segregation for property stamp duty purposes in Class. For details, see Limitation of partial segregation for property stamp duty in Class