In CCSR v Benidorm Pty Ltd [2020] NSWCA 285, the NSW Court of Appeal found that a ‘declaration of trust’ did not trigger duty on the basis that it merely acknowledged the existence of an existing trust.
In this case the parties executed a declaration of trust under which the trustee declared it would hold the title to a property in a manner that was consistent with the provisions of a deceased’s will. The Court of Appeal found that the declaration of trust did not affect a transaction but merely acknowledged an existing legal position and therefore was not liable to duty under the NSW Duties Act. That is, a document which merely acknowledges an existing state of affairs is not a dutiable transaction. This was so even though the declaration contained an indemnity.
While this is a welcome outcome for the trustee in this case, it highlights the risk of preparing declarations of trust in relation to dutiable property. Care should be given in such situations and, in particular, whether a declaration is required at all.
To discuss further or for more information please contact:
Phil Broderick
Principal
M +61 419 512 801 | T +61 3 9611 0163
E: pbroderick@sladen.com.au
Laura Spencer
Senior Associate
M +61 436 436 718 | T +61 3 9611 0110
E lspencer@sladen.com.au
Denise Tan
Senior Associate
M +61 438 714 965 | T +61 3 9611 0160
E: dtan@sladen.com.au
Lucy Liang
Graduate Lawyer
E lliang@sladen.com.au
