- When establishing a discretionary trust on the NI document platform, you will be asked the following question: ‘Would you like to exclude the trustee as a beneficiary to ensure the NSW duty exemption for changes of trustee is available for any future change of trustee? In NSW, a change of trustee of a discretionary trust can inadvertently trigger ad valorem stamp duty on the value of the Trust Property.
The relevant provision is as follows:
A change of trustee with respect of a trust which may be constituted under the Deed will be subject to only nominal duty for the purposes of Subsection 54(3) of the Duties Act 1997 (NSW), if the Chief Commissioner is satisfied that, as the case may be:
- none of the continuing trustees remaining after the retirement of a trustee is or can become a beneficiary under the trust, and
- none of the trustees of the trust after the appointment of a new trustee is or can become a beneficiary under the trust, and
- the transfer is not part of a scheme for conferring an interest, in relation to the trust property, on a new trustee or any other person, whether as a beneficiary or otherwise, to the detriment of the beneficial interest or potential beneficial interest of any person. If the Chief Commissioner is not satisfied, the transfer is chargeable with the same duty as a transfer to a beneficiary under and in conformity with the trusts subject to which the property is held, unless subsection (3A) applies.