Question: How Do I Pay Stamp Duty On a Discretionary Trust in NSW?Answer:
If you are setting up a discretionary trust in New South Wales, you will need to pay stamp duty after signing the trust deed. Stamp duty is a separate transaction to acquiring or transferring property into the trust. In NSW, you must first pay trust stamp duty on the declaration of the trust itself.
When to Pay Trust Stamp Duty
Stamp duty is payable by the person declaring the trust. The duty payable is $500 and it must be paid within three months of the date from which the trust deed is executed. You pay this duty to the NSW Government Office of State Revenue (OSR). If you fail to pay stamp duty on time, a penalty will apply. You will also be liable for interest on the late payment.
How to Pay Trust Stamp Duty
You will need to complete a statutory declaration and send it to OSR along with your trust deed. Once you have completed the statutory declaration and your trust deed is ready to be sent, you can engage a settlement agent who is an approved client service provider to pay your stamp duty.
You can pay stamp duty online by becoming an approved EDR client. EDR stands for Electronic Duties Returns and is a service that allows you to pay duty online. To register to become an EDR client, you must engage an approved client service provider, register for EDR online, then complete EDR online training. The OSR website lists approved client service providers.
Once you are approved as an EDR client, you are then able to access the OSR document stamping service. You can then select the document type as being a trust deed and enter all the required information. Once accepted, you will be issued with a duties notice of assessment and duties statement. You can pay the EDR by BPAY, electronic funds transfer (EFT) or mail.
Opening a Trust Bank Account Before the Trust Deed is Stamped
You can open a bank account for the trust before the treed deed is stamped, though it depends on the requirements of the individual bank. As long as the bank does not require proof of the trust deed, you can open a bank account as soon as the trust is operational.