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South Australian stamp duty changes

State Budget introduces some bold stamp duty changes which significantly alter stamp duty impost on business transactions.

As you may be aware, last Thursday’s State Budget introduced some bold stamp duty changes with immediate effect. Those changes significantly alter the stamp duty impost on business transactions. Business restructures that were perhaps prohibitive due to South Australian duty should now be reconsidered.

The measures that take effect from 18 June 2015 are as follows:

Abolition of stamp duty on non-real property transfers

Transfers of most forms of business assets are now duty exempt. From 18 June 2015, there is no stamp duty on transfers of:

  • Goodwill;
  • Trading Stock;
  • Plant and equipment that is not fixed to land;
  • Intellectual property;
  • Statutory leases and licences (such as fishing licences, taxi licences, gaming machine licences and entitlements);
  • Receivables (i.e. assignment of debt).

Abolition of stamp duty on non-quoted marketable securities (share duty)

Private company share transfers no longer attract duty in South Australia (providing the company is not a landholder). Again this presents significant restructuring opportunities and will ensure that acquisitions of South Australian registered companies can be more cost effective.

Expansion of the availability of corporate reconstruction relief

The eligibility criteria applying to stamp duty relief for corporate reconstruction will be amended to facilitate greater use of this concession. This exemption from duty can apply on “intra-group” transfers between members of a corporate group. These changes reduce the stamp duty impediment on the restructure of a corporate group.

With the abolition of duty on non-real property transfers, these provisions will be of greater significance to landholding entities.

Measures to Take Effect from Date of Assent

Primary production family farm transfers will be revisited.

It is proposed that the long standing RevenueSA practice whereby transfers of primary production land between family members involving discretionary trusts will continue to come within the exemption. The detail however is yet to be released so we cannot precisely say what the new intergenerational primary production land transfer exemption will involve.

Measures to Take Effect from 1 July 2016-2018

Duty on non-residential, non-primary production real property is also proposed to be phased out over a three year period commencing 1 July 2016.

This duty will be phased out by one third reductions over a three year period commencing from 1 July 2016, with the duty being abolished entirely from 1 July 2018.

The costs relating to commercial property transfers will be significantly less with a full exemption from 1 July 2018. These measures will have significant ramifications for property investors and developers.

Measure to Take Effect from 1 July 2018

An abolition of stamp duty on the transfer of units in a unit trust is proposed.

It is proposed that duty will be abolished on the issue, redemption and transfer of units in private (or non-listed) unit trusts from 1 July 2018. Duty is then only payable when unit trusts hold residential or primary production land.

Action Point: In light of these changes, a range of proposed sales, acquisitions and restructures should be revisited. Please feel free to contact a member of our Tax & Revenue Group should you require further information.

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