Beware stamp duty traps when transferring economic benefits

In most States and Territories stamp duty is usually not payable when the economic benefits associated with land are transferred but there is no transfer of the property itself. However, it's not always black and white. There are circumstances where a stamp duty liability can be triggered as underscored in a recent case in South Australia.

A transfer of, or declaration of trust over, property is generally liable to stamp duty. However, if parties only intend to transfer the economic benefits of holding property, without transferring the property itself or creating a trust, then duty may not be payable. The key issue is where to draw the line in distinguishing between the two.

The Victorian stamp duty legislation seeks specifically to tax acquisitions of economic benefits: see our article setting out the position in Victoria. This is not generally the case in other States and Territories.