Abolition of stamp duty on purchase of business assets in New South Wales

On 1 July 2016 certain duties were abolished in New South Wales, including stamp duty on the purchase of certain business assets.

A business’s purchase price can be, and often is, apportioned between a number of items including goodwill and plant and equipment, and often the most significant portion of the business’s purchase price is related to its goodwill. A business’s goodwill and intellectual property, which have been exploited in New South Wales, are classes of business assets that no longer attract stamp duty, which is good news for many purchasers.

However, as a business purchaser, technically you may still be liable to pay duty in NSW on a range of other assets included in the transaction, including land (and interests in land such as a lease) and certain other goods (including business plant and equipment) if certain circumstances exist.

However, there may still be a reprieve for stamp duty on plant and equipment in circumstances where the value of the plant and equipment is more than 90% of the total dutiable value of dutiable property transferred. In these circumstances the Commissioner of State Revenue may disregard the plant and equipment value for stamp duty purposes and duty will only be payable on the remaining dutiable property, which will very often be a nominal value of the lease.

Tips:

  • whether stamp duty is payable on the purchase of a business in NSW requires careful consideration of the individual circumstances of your purchase; and
  • it will still be necessary to have the form of transfer of a NSW lease stamped prior to registration.

If you require advice of your sale or purchase of a business in NSW, contact Michael Bracken, Principal. This article was published in Commercial insights, February 2017.


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