Stamp duty throughout Australian States and Territories

NSW Duty Changes 

On 1 July 2016, the NSW Government abolished duty on transactions involving the following types of property:

a) goodwill;

b) intellectual property;

c) NSW statutory licenses;

d) shares in companies incorporated in NSW; and

e) units in unit trusts (Where unit register held in NSW)

This effectively places NSW as the fifth jurisdiction to join those states and territories that are regarded as following the LBR.

NSW has, like Victoria, Tasmania, WA, the ACT and the NT, retained a system of taxing certain goods that might be transferred subject to an arrangement that is a dutiable transaction.  Those goods must be situated in NSW and excludes trading stock, materials for manufacture, goods under manufacture and livestock for example.


States that have adopted the LBR have the following implications:

a) for acquisitions of business, no duty on the good will of those businesses that trade solely in the LBR jurisdictions;

b) for businesses that trade in both LBR jurisdictions and jurisdictions that still subject non-real property assets to duty, significant apportionment issues arise;

c) share acquisitions of non-landholding entities are entirely exempt from duty in all jurisdictions;

d) fixtures to land either under general law or subject to specific statutory extensions, continue to be subject to duty; and

e) restructuring businesses, increased incentive to use capital gains tax roll-overs and other income tax relief as it is commercially viable

Business acquisitions – cross jurisdictional issues

Where business acquired that operates in more than one jurisdiction, it is necessary to apportion the revenue generating activities across the relevant jurisdictions to determine the amount of duty payable in each jurisdiction.

Asset acquisitions – Goodwill

The High Court in Murray’s case highlighted that goodwill is an indivisible item of property that is inseparable from the conduct of a business and so it is not possible to have legally separate and distinct goodwill across multiple jurisdictions where there is only a single business.

Therefore, apportionment of the goodwill across each jurisdiction is necessary.

LBR – General observations

LBRs generally operate in way that involves a duty being imposed where there is an acquisition of a landholding entity.

Fixtures play a significant role since they form part of the land for transfer duty and landholder duty purposes. A fixture is an item of tangible property annexed to land in such a way that it forms part of the land (e.g. permanent buildings, pipes, air-conditioning units and other machinery built specifically for a particular building). Consistent with t duty law treatment, ownership of the fixture follows ownership of land. The test to determine whether an item is a fixture is a matter of fact and requires an assessment of the mode of annexation and the object of the annexation of the item.

New development – Introducing restructure relief

Corporate reconstruction relief applies in all jurisdictions if following criteria are satisfied:

a) transaction is a ‘corporate reconstruction transaction’;

b) undertaken for purpose of changing structure of a corporate group or changing holding of asset within corporate group; and

c) transaction not undertaken for purpose of avoidance

It is important to note that a corporate reconstruction transaction requires a corporate group to exist. This requires an entity to hold at least 90% of the securities and voting power of the entity.

New Development – Corporate consolidation relief

This type of relief applies in all jurisdictions except South Australia, Tasmania and the ACT. It requires the following:

a) a transaction made to interpose a corporation (Head Corporation) between another corporation (Affected Corporation) and the holders of the Affected Corporation’s securities;

b) the only consideration given by the Head Corporation is the issue or transfer of its securities to the person(s) from whom the Affected Corporation’s securities were transferred or acquired;

c) the Head Corporation cannot hold dutiable property, vehicles or shares; and

d) the Head Corporation’s securities must be held by the same persons and in the same proportions as were previously held in the Affected Corporation

Common concessions 

Concessions and exemptions arise in land and business restructures and are critical when restricting private groups. Concessions have a different context over time as most Australian jurisdictions move towards a LBR.

Company liquidations – in specie distributions

In specie liquidator distributions of company property to shareholders on the winding-up of a company are treated differently between jurisdictions.

For example, the circumstances in which liquidator distributions may be exempt from duty in NSW, Victoria, Queensland and the ACT are more restrictive. Relief is normally only available in these jurisdictions to the extent the distribution falls within the corporate reconstruction relief provisions.

Change of Trustee

This gives rise to a change in legal ownership of dutiable property subject to a trust. In absence of concession, this process gives rise to a dutiable transaction where dutiable property is involved.

The transaction must merely arise to effect the retirement/removal of a trustee and/or the appointment of a new trustee and to vest trust property accordingly.

A requirement that there is no change in the rights or interests of the beneficiaries or any detriment caused to any beneficiaries as a result of the transaction.

In NSW and the ACT, there is a requirement that replacement or continuing trustees cannot be or become beneficiaries of the trust (including potential beneficiaries of a discretionary trust). This will cause issues in the case of discretionary trusts which typically have broad classes of eligible beneficiaries.

In specie distributions from trusts and superannuation funds

This potentially qualifies for exemptions or concessional duty treatment in each jurisdiction. There may be an outright exemption from duty or only a nominal amount of duty payable.

In specie distributions from discretionary trusts DO NOT normally qualify under the NSW and ACT provisions because the exemption only applies to trusts that are declared over specific property.

Victoria has express exemptions for distributions from fixed trusts, discretionary trusts and unit trusts.

Distributions from superannuation funds are explicitly exempt or subject to nominal duty in Victoria, Queensland and WA provided certain conditions are satisfied.

Transfers to trusts and superannuation funds

The circumstances in which transfers of dutiable property to trusts and superannuation funds will qualify for duty relief are generally speaking more limited. Transfers of dutiable assets to trusts are dutiable in most instances with limited concessions.

Victoria, SA, WA, Tasmania and NT provide for intergenerational stamp duty relief for transfers to trustees of discretionary trusts involving primary production land.

The broad requirements for intergenerational stamp duty relief provisions are:

a) beneficiaries of the recipient trust are limited to family members of the transferor. This often requires the establishment of a new trust for this purpose with limited beneficiaries; and

b) the land is used in the business or for the purpose of farming or primary production

In regards to trust deeds, NSW requires that there are more members of the superannuation fund than the transferors under the transfer, the fund deed provides:

a) that the dutiable property is ‘segregated’ from other fund property

b) the property is to be used solely for the purpose of providing a retirement benefit to the member or members transferring or agreeing to transfer the property; and

c) the property is to be use for the benefit of those members in the same proportions as it was held by them before the transfer to the fund

Peter Gell

Peter was admitted as a solicitor in 1981 and holds qualifications in law and a Masters degree in taxation conferred by the University of NSW. Peter practises in taxation advisory, estate planning and wills, probate and commercial law.