It’s just a transfer of land

3 February, 2017

Some clients might think preparing a transfer of land from a trustee to a beneficiary, between spouses and/or between related corporate entities should be a simple and cheap job.

Experienced practitioners know these sorts of transfers are anything but simple and should be treated no differently to an arm’s length conveyance.

One practitioner recently told LPLC that the way they deal with clients who believe related party transfers are simple is to give them a list of issues which need to be addressed. The list includes items such as duty payable, capital gains tax, notification to various authorities and dealing with any mortgagee on title.

This comment is one of the reasons LPLC has developed Tax issues checklist, a new checklist which contains seven sections dealing with duty, CGT, land tax, administrative matters like applying for a TFN, lodging fees, subdivisions and other charge. There are also about 25 hyperlinks in the new checklist to assist practitioners access the relevant information.

One important feature of the checklist is the ability to tick a box indicating whether the client or the practitioner is responsible for considering the selected item further.

For some items both practitioner and client may be selected and a column has been included for initial comments. LPLC recommends that a memorandum be sent to the client after the checklist is completed setting out what was agreed.

The likelihood of receiving a claim for failing to advise on a tax issue can be greatly reduced by addressing any relevant tax issues at the start of a matter. It will also improve communication with clients as well as comply with rule 7 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 which requires practitioners provide clear and timely advice to assist clients to make informed choices.