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Duty Exemption for Eligible Small Business Restructures

By Peter Duffy

16th November 2020

On 25 September 2020 the Office of State Revenue ("OSR") released Public Ruling DA000.16.1. That Ruling provides an exemption for transfer duty (and vehicle registration duty) for certain transactions relating to particular small business restructures.

Legislation has not yet been passed in relation to these matters but it is anticipated that that will occur in the near future.

Transactions entered into on and from 7 September 2020 will be eligible for the exemption if they qualify.

To qualify for the exemption the following must be satisfied:

  • The seller / transferor must be one of the following:
    • An individual;
    • A partnership; or
    • A discretionary trust.
  • The property being transferred by the seller / transferor must have a dutiable value of not more than $10,000,000.00;
  • The seller / transferor must have an annual turnover of not more than $5,000,000.00 and the business must be conducted from Queensland;
  • The transferee must be an unlisted corporation which is either:
    • Newly registered; or
    • Has been dormant since its registration.
  • All members of the seller / transferor entity must be shareholders of the transferee company. Particular considerations are needed here where the seller / transferor is a trust;
  • If the shareholders in the transferee company hold their interests in the same shares / proportions as previously held in the seller / transferor, the Duty exemption will be entirely / completely available. Partial exemptions may be available where the shares / proportions are held in different ratios within the transferee company.

Should you wish to consider restructuring the entity which owns and operates your small business to a corporate structure please let us know so that we can consider your particular circumstances in detail and advise whether the above mentioned exemption may be available to you.

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