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Related Party Transfers

We're experts in managing related party transfers involving family members and trusts.

This is a broad, complex area of law and it is critical to get good advice. A transfer of property between related parties can be a complex and costly process if not handled correctly, and you risk finding yourself in a difficult position after the transaction is complete.

  • What is a related party transfer?

    In related party transfers (RPTs), the parties to the transfer are related by either blood or marriage – or are in a business or personal relationship – and therefore the dealing is not at ‘arm’s length’. ‘Arm’s length’ transactions are those where money is exchanged by unrelated parties.

    The categories of relationship are wide and include:

    • Spouses (married, de facto and same sex)
    • Deceased estates (transfer to a surviving spouse, executor or beneficiary of a will)
    • Siblings, parents, children and grandparents
    • Companies and directors
    • Self-managed superannuation funds (SMSFs)
    • Family trusts or unit trusts (or companies)
    • All other transfers of title where the parties are associated in some way

    All RPTs should be managed differently, but they each require attention when it comes to things like stamp duty concessions and applicable legislation. RPTs can change the amount of payable transfer duty and some transactions are even exempt from duty.

    Please note that these transactions can take over a month to complete, so it is essential to engage experienced lawyers to assist with the process and ensure a timely, effective transfer.

  • How do I transfer property to a related party?

    If you want to transfer a property you own or a part share thereof to a spouse, family member or friend, we suggest engaging a lawyer who can help with the process and prepare a contract if required.

    Contracts aren’t always necessary – for instance, where a family court order is involved or if the property is being gifted to a family member – so sometimes you may only need a transfer of land document.

    Related party sale transactions can be complex and you may need to seek financial, banking, accounting and even family law advice. Therefore your lawyer must be experienced in these transactions, or you may find yourself in a difficult position once the transfer is complete.

  • What do I need to consider?

    Most clients only consider stamp duty and want to pay the minimum amount. While minimising duty is a consideration, we also look at your financial circumstances, the impact on capital gains tax, potential issues with Centrelink payments, negative gearing and asset protection. Considering the broader impacts of your proposed RPT will ensure that the transaction leaves you in the best financial position.

    Please note that the State Revenue Office (SRO) takes a special interest in RPTs because duty is payable on the full value of the property transferred, regardless of the amount paid by the purchaser. This means you will need to provide third-party evidence of the value of the property (eg from a real estate agent or property valuer). Note that payment of ‘full value’ may be achieved by the new owner entering into a loan agreement with the present owner for the difference between the full value and the amount paid by the new owner. Your lawyer can prepare any loan agreement for you.

    Your lawyer can also consider whether any stamp duty concessions are available in your circumstances (for example, the First Home Owners Grant) and can advise you on what documentation you will need to support any concession or grant application. Your lawyer can prepare and submit these on your behalf.

  • Is the process for all related party transfers the same?

    No. There are different kinds of RPTs and each will come with a different process. For example, in a simple transfer, the property is not subject to a mortgage and will not require a new mortgage. In this situation, an RPT only requires a signed transfer of land (TL) and evidence of the property’s value, provided to the State Revenue Office. The transfer is assessed for duty, the duty paid and the TL lodged at the Land Titles Office for registration.

    However, most properties are subject to a mortgage, which complicates RPTs because a third party lender is involved. In this situation, the existing mortgage will generally need to be discharged and therefore the present owner must be sure that s/he is able to pay it out. Alternatively, the new owner must enter into a new mortgage.

    If you are only adding another owner to the property title, you will still need both the present owner and the additional one to sign new mortgage documents.

    If the transfer involves an SMSF or trust, additional documentation may be required.

    In all cases, your lawyer can undertake the lodgement of any documents on your behalf, and can also liaise with any third parties (eg lenders) for you.

Why choose Slater and Gordon?

We have acted for a range of clients in related party transfers and are experienced in managing them effectively and efficiently – with regard to all the relevant factors involved.

Please note we can act for both the present owner and the new owner, but we must have an acknowledgement from each party that we are acting for both.

By choosing us, we promise to:

  • Ensure all relevant factors are considered
  • Minimise stress
  • Handle all relevant documentation, lodgement and correspondence with third parties
  • Ensure the transaction will leave you in the best possible position (financial or otherwise) after completion
  • Guide you through the process and keep you informed at every step

Make an enquiry

If you have a question, want some more information or would just like to speak to someone, make an enquiry now and we’ll be in touch with you very soon.

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