Limited recourse borrowing arrangements (custodian and holding trusts)

Circumstances/Transactions:

A declaration of trust made by an apparent purchaser in respect of identified dutiable property where: 

• The trustee of a regulated superannuation fund (RSF) is undertaking a limited recourse loan pursuant to section 67A or 67B of the Superannuation Industry (Supervision) Act 1993;
• The acquirable asset is being held on bare trust by the custodian for the trustee of the RSF; and 
• Both the custodian and the RSF trustee are companies.
   

Evidence:

At the time of lodgement for duty assessment via Duties Online (DOL), the DOL user must sight the executed trust instrument by one of the following means:

• having physical possession of the original or full copy of the executed trust instrument
• having possession of a scanned full copy of the original executed trust instrument.

The declaration of trust must adhere to the following rules:

• The loan is applied for the acquisition of a single acquirable asset including expenses incurred in connection with the borrowing or acquisition.
• The acquirable asset is held on trust for the RSF trustee.
• The RSF trustee has a right to acquire legal ownership for the acquirable asset by making one or more repayments after acquisition.
• The lender’s rights are only secured against the relevant acquirable asset.

The DOL user must continue to maintain hard copy or electronic records, including a copy of the executed trust instrument and how the executed trust document was sighted.