The Family Law Act 1975 has for a long time provided that transactions are to be free from stamp duty if they are entered into for the purpose of, or in accordance with, a Family Court Order.
However, OSR has previously taken a very strict view about what is exempt.
OSR has just issued Practice Direction 45.3 about the scope of the exemption. It represents a significant change in OSR's approach and significantly broadens the scope of transactions OSR accepts as being exempt.
A transaction that is now entered into as a result of a Family Court Order (including a consent order) will be exempt from duty regardless of the parties. The Practice Direction only applies to a Family Court Order, so a transfer under either of the following are outside the scope of the Practice Direction:
- a settlement in a Binding Financial Agreement; and
- a property settlement for a de facto couple (at least for the moment).
This means OSR now accepts the following transactions will be exempt from duty:
- a transfer of an asset from a company controlled by one party to the marriage to the other party (or a their family trust or other related entity); and
- a transfer of an asset held jointly or by one of the parties to the marriage to a family trust or related entity controlled by the other party.
However, for the exemption to apply the transaction must be:
- specifically referred to in the Family Court Order; and
- entered into after the Family Court Order is finalised.
The Practice Direction applies to Family Court Orders entered into after the 23 June 2008.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
