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Wholesale unit trust schemes are not established for a particular investor, not less than 80% of the units in the scheme are held by qualified investors, and no qualified investor (together with associated persons) holds 50% or more of the units in the scheme.
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Landholder duty is charged on a relevant acquisition in a unit trust scheme that directly or indirectly holds NSW land with an unencumbered value of $2 million or more.
A person makes a relevant acquisition where the interest acquired, either on its own or when aggregated with certain other interests acquired and/or held by the person or others, amounts to a significant interest in the unit trust scheme.
Significant Interest (acquisition threshold)
An interest in a unit trust scheme will amount to a significant interest if it gives the person holding the interest an entitlement to a distribution of:
90% or more of the property of a public unit trust scheme (i.e. a listed trust or a widely held trust);
On and from 1 February 2024,
50% or more of the property of a wholesale unit trust scheme or an imminent wholesale unit trust scheme registered as such with the Chief Commissioner of State Revenue;
20% or more of the property of a private unit trust scheme (i.e. any other unit trust scheme).
The 50% acquisition threshold applies to acquisitions in all private unit trusts schemes (including schemes that may be eligible for registration as Wholesale or Imminent Wholesale Unit Trust Schemes but have not so registered), made on or after 1 February 2024, if the acquisition arose from an agreement or arrangement entered into before 19 September 2023.
The 50% acquisition threshold applies to acquisitions in wholesale or imminent wholesale unit trust schemes made on or after 1 February 2024 if the scheme is registered as a wholesale or imminent wholesale unit trust scheme on or before the acquisition.
To access the 50% acquisition threshold, the responsible entity of the unit trust scheme (or the trustee if there is no responsible entity) must apply to register the wholesale unit trust scheme or the imminent wholesale unit trust scheme under Division 2, Part 2 of Chapter 4 of the Duties Act 1997.
For registration as a wholesale unit trust scheme, the Chief Commissioner must be satisfied that:
The scheme has not been established for a particular investor; and
Not less than 80% of the units in the scheme are held by qualified investors (as defined in section 157AB); and
No qualified investor (together with associated persons) holds 50% or more of the units in the scheme.
For registration as an imminent wholesale unit trust scheme, the Chief Commissioner must be satisfied that the unit trust scheme will be a wholesale unit trust scheme within 12 months after the day on which the first units in the scheme are issued to a qualified investor. It is a condition of registration of an imminent wholesale unit trust scheme that units are not issued in the scheme other than for the purpose of the scheme becoming a wholesale unit trust scheme.
For registration as a wholesale unit trust scheme or an imminent wholesale unit trust scheme under section 157AD, you will need to complete the following steps:
a wholesale unit trust scheme remains registered for 3 years (registration may be renewed by making a further application for registration and paying any prescribed application fee)
an imminent wholesale unit trust scheme remains registered for 1 year (the scheme may continue to access the 50% acquisition threshold after this time by applying for registration as a wholesale unit trust scheme and paying any prescribed application fee)
Where a registered unit trust scheme ceases to meet the eligibility criteria or fails to comply with a condition of registration:
the responsible entity must notify the Chief Commissioner of the disqualifying circumstance by email to private.ruling@revenue.nsw.gov.au within 28 days after it occurs. Note: The failure to provide this notice in time will incur a penalty of twice the amount of duty chargeable (if any) under section 157AH; and
the scheme will be taken to be a private unit trust scheme from the day the disqualifying circumstance occurred (or from the commencement of registration for an imminent wholesale unit trust scheme that will consequently not be a wholesale unit trust scheme within the requisite 12 months).
A statutory body that does not otherwise meet the definition of ‘qualified investor’ in section 157AB of the Duties Act 1997 may request the Minister consider prescribing it as a qualified investor under section 157AB(1)(h1).
