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Residential property

When the sale of a trust can lead to Transfer Duty

Just as the sale of shares in a company owning mainly residential property is deemed, for Transfer Duty purposes, to be the sale of the property, so too is the sale of a trust that owns residential property. A trust will be recognised as having been sold when there is any change of trustees. So what if it was a shelf trust sold for the purpose of buying residential property? Firstly, we prefer not to sell shelf trusts as there’s double work involved, first to form the trust, then to change it. However, occasionally a client…

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Transfer Duty on sale of a company owning residential property

Once upon a time, you could sell the shares in a company that owned fixed property and only pay Securities Transfer Tax (1/4%). Then in December 2002 it all changed. That was a long time ago, but many people still don’t understand the full implications, so here they are – A Residential Property Company is one which owns a dwelling or dwellings and their fair value exceeds 50% of the assets of the company, excluding financial instruments. If shares in that company are sold, then the shares are treated as fixed property and the sale attracts Transfer Duty, not on…

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