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Establishment of a trust relating to unidentified property and non-dutiable property

This EDR assessing guide is provided to assist industry professionals understand the requirements when self-assessing and processing transactions using EDR.

For a comprehensive understanding, it is recommended that this guide is read in its entirety.

Chapters

1. Overview

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An instrument that establishes a trust may be liable to duty in NSW.

Section 58 of the Duties Act 1997 charges duty of $750 on a declaration of trust executed in NSW relating to:

non-dutiable property, section 58(1)
unidentified property, section 58(2).

Duty of $500 is chargeable on a declaration of trust entered into before 1 February 2024.

The documents that are typically assessed pursuant to these sections are often referred to as:

discretionary/family trust deeds
unit trust deeds
security trust deeds.

A declaration of trust is defined in section 8(3) of the Duties Act 1997.

If a declaration of trust is over dutiable property, it may be liable to ad valorem duty under section 8 and section 11 of the Duties Act 1997.

Liability date

The declaration of trust is liable to duty from first execution, as specified in section 12 and section 295 of the Duties Act 1997.

Liable party

Under section 58(5) of the Duties Act 1997, duty is payable by the person declaring the trust (the trustee).

Duty payable

Under section 17 of the Duties Act 1997, duty is payable within three months from the liability date.

Calculating interest

If payment is made after the due date (i.e. 3 months after the liability date) interest will accrue and penalty tax may be imposed. Interest is calculated on a daily basis from the end of the due date until the day duty is paid.

For further information about the current interest rates, refer to Interest and penalty tax.

To calculate interest, you can use our interest calculator.

For more information, see Part 5 of the Tax Administration Act 1996 No 97 (TAA).