The 2015-16 State Budget introduced a number of much welcomed stamp duty changes. The most significant of these changes relate to an abolition of stamp duty on business transactions and share transfers in private companies.
As of 18 June 2015, the following take effect:
- Abolition of stamp duty on share transfersA transfer of shares in private companies (that do not own land) are no longer subject to stamp duty.
- Abolition of stamp duty on business transfersStamp duty is no longer payable with respect to a transfer of business. This simply means that a transfer of your typical business assets such as goodwill, trading stock, plant & equipment, intellectual property, leases, licences and receivables do not attract stamp duty.
- Expansion of the availability of corporate reconstruction reliefStamp duty is payable on corporate reconstructions, however under an administrative scheme, the Minister for Finance has the power to grant ex gratia relief from the payment of stamp duty provided a number of conditions are met. The recent changes under the latest State Budget announcement means that the eligibility criteria applying to stamp duty relief will no longer:
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- Require ‘substantially all’ of the property of the transferor to be transferred to another member of the corporate group;
- Require the transferor and the transferee to have been members of the same corporate group for at least 3 years prior to the restructure;
- Require the assets transferred under an exempt transaction to be retained within the corporate group for at least 3 years after the exempt transaction; or
- Preclude relief to a corporate group that has the trustee of a discretionary trust as the ultimate parent corporation (however the transferee of the property cannot be the trustee of a discretionary trust).
In light of the above changes, a review of your personal business circumstances involving a restructure, proposed sale or purchase should be considered.