Update: NSW Government has significantly expanded the scope of existing stamp duty regime

3 minute read  01.06.2022 Nathan Deveson, Rebecca Barbour

The State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW) from 19 May 2022 introduced measures to impose two new types of dutiable transactions: acknowledgements of trusts and changes in beneficial ownership.


Key takeouts


  • Revenue NSW has confirmed that all options to purchase dutiable property are dutiable on grant. Duty will apply on the option fee and there is no credit on any subsequent Agreement.
  • Acknowledgements of trust risk double duty in any document relating to dutiable property, even if innocuous. An obvious issue arises in custodian liability clauses where the custodian is named as acting for a named entity (trustee or responsible entity).
  • These clauses need amendment. Wherever a trustee relationship is stated it must be limited to being described (if it needs to be) as trustee of a named trust. Whilst we understand the Regulations will deal with a range of issues in relation to leases, we still have no guidance.

The NSW Bill (now Act) outlined in NSW Government proposes to significantly expand scope of existing stamp duty regime commenced on 19 May 2022, bringing to duty transactions and statements that were previously not caught, and targeting taxpayers and advisers alike with a re-write of the anti-avoidance provisions. This is an update on the issues that have arisen and what needs to be urgently resolved.

The State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW) from 19 May 2022 introduced measures to impose two new types of dutiable transactions: acknowledgement of trusts and changes in beneficial ownership. These have wide ranging impacts and risks for our clients.
Despite assurances that forthcoming exempting Regulations will narrow down the unintended consequences, Revenue NSW has not issued any to date, and we have been managing the transition, in consultation with Revenue NSW.

Without undue alarm we note some risks have crystallised and not all may be resolved by the Regulations when they arrive. The current state of play is:

1. Revenue NSW has confirmed that all options to purchase dutiable property are dutiable on grant. Duty will apply on the option fee and there is no credit on any subsequent Agreement.

2. Acknowledgements of trust risk double duty in any document relating to dutiable property, even if innocuous. An obvious issue arises in custodian liability clauses where the custodian is named as acting for a named entity (trustee or responsible entity). These clauses currently need amendment. Wherever a trustee relationship is stated it must be limited to being described (if it needs to be) as trustee of a named trust. You should not use terms like 'trustee for', 'agent for' or 'held for' a named person or defined class of persons – but you can state the capacity of the trustee in relation to a named trust. This wording can be a problem in any part of a document including execution clauses and may extend to other incorporated documents. Failing to amend these clauses may give rise to a technical risk that duty is payable on the value of the underlying assets held.

3. Whilst we understand the Regulations will deal with a range of issues in relation to leases, we still have no guidance. Unresolved questions exist where there are positive obligations on the lessee to undertake works (such as make good works) or clauses dealing with ownership of fit out. They may create numerous 'transfers' of beneficial interests in the rights a lessee has. This gives rise to uncertainty around whether these transfers are dutiable. Whilst the delay in issuing the Regulations is unsatisfactory you should be aware of the risks on any current deals.

4. The breadth of what has been enacted (in the absence of limits at this stage) casts a wide net, but we anticipate we will have clarity on some issues soon. We would be happy to discuss transactions and our approaches in detail should you have any concerns.

5. We will issue a further update as soon as there are further developments or new issues come to the fore.

For advice and assistance in relation this, please contact our team.

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https://www.minterellison.com/articles/nsw-government-has-significantly-expanded-the-scope-of-existing-stamp-duty-regime

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