36AProperty passing to beneficiaries of discretionary trusts

36A Property passing to beneficiaries of discretionary trusts (1) No duty is chargeable under this Chapter in respect of a transfer of dutiable property that is subject to a discretionary trust (***the principal trust***) to a beneficiary of the trust if— (a) the duty (if any) charged by this Act in respect of the dutiable transaction that resulted in the dutiable property becoming subject to the principal trust has been paid or the Commissioner is satisfied that the duty will be paid; and (b) the beneficiary— (i) was a beneficiary at the relevant time; or (ii) became a beneficiary after the relevant time by reason of— (A) becoming a spouse or domestic partner of a beneficiary within a class of beneficiary described in the principal trust; or (B) becoming an adopted child or step child of, or being a lineal descendant of, a beneficiary within a class of beneficiary described in the principal trust; or (C) being an adopted child, step child or lineal descendant of a person referred to in sub‑subparagraph (A); and (c) the transfer is— (i) to the beneficiary absolutely; or (ii) to the beneficiary as trustee of another trust of which all the beneficiaries are relevant beneficiaries; and (d) if— (i) the transfer is to the beneficiary absolutely; and (ii) the beneficiary is a corporation— all the shareholders of the corporation are natural persons who were beneficiaries of the principal trust at the relevant time; and (e) the Commissioner is satisfied that the transfer is not part of a sale or other arrangement under which there exists any consideration for the transfer. (2) A reference in this section to dutiable property becoming or first becoming subject to a trust includes a reference to property from which that dutiable property was derived, by subdivision or consolidation of titles, becoming or first becoming subject to the trust at a time when the transferee was a beneficiary of the trust. ***beneficiary*** of a discretionary trust means a person, or a member of a class of person, in whom, by the terms of the trust, the whole or any part of the capital of the trust estate may be vested or remain vested— (a) in the event of the exercise of a power or discretion in favour of the person (whether or not that power is presently exercisable); or ***discretionary trust*** means a trust under which the vesting of the whole or any part of the capital of the trust estate— (a) is required to be determined by a person either in respect of the identity of the beneficiaries or the quantum of interest to be taken, or both; or (b) will occur in the event that a discretion conferred under the trust is not exercised; or (c) has occurred but under which the whole or any part of that capital will be divested from the person or persons in whom it is vested if a discretion conferred under the trust is exercised— but does not include a trust to which a unit trust scheme relates; ***relevant beneficiary*** of a trust means— (a) a natural person who— (i) was a beneficiary of that trust at the relevant time; or (ii) became a beneficiary of that trust after the relevant time by reason of— (A) becoming a spouse or domestic partner of a beneficiary within a class of beneficiary described in the principal trust; or (B) becoming an adopted child or step child of, or being a lineal descendant of, a beneficiary within a class of beneficiary described in the principal trust; or (C) being an adopted child, step child or lineal descendant of a person referred to in sub-subparagraph (A); or (b) a corporation as trustee of a further trust, all the beneficiaries of which are persons referred to in paragraph (a); ***relevant time*** in relation to dutiable property that is subject to the principal trust, means the time at which the property first became subject to the principal trust. S. 36B inserted by No. 84/2006 s. 3, substituted by No. 31/2008 s. 7.