Assessing if business asset transfers are dutiable

When you buy (or acquire) a Queensland business, you may be liable for transfer duty on the transfer of business assets.

‘Business assets’ are any of the following:

• goodwill
• a statutory business licence
• a right to use a statutory business licence
• a business name
• a right under a franchise arrangement
• a debt of a business if the debtor lives in Queensland
• a supply right of a business
• intellectual property
• personal property in Queensland (e.g. trading stock or plant and equipment).

Generally, when you buy a Queensland business, you will enter into a contract or an agreement. The agreement should outline the business assets that are being transferred (e.g. business name, goodwill, stock in trade).

If your business assets transaction is dutiable and you do not lodge it for assessment, you may be liable for unpaid tax interest and penalties on the unpaid duty.

Assessing business assets

In certain cases, transfer duty may not apply to an agreement to transfer business assets if it is solely for the transfer of:

• a debt of a business
• a supply right of a business
• intellectual or personal property of a business.

This only applies if no other property is being transferred in the agreement. See section 37 of the Duties Act 2001 for more information.

Goodwill included in the transfer

Your agreement may not specifically mention goodwill as part of the transaction, but it may still form part of your transaction. If you are unsure, you should speak to your legal or financial adviser. The existence of goodwill may make your transaction dutiable, so it is very important that you clarify this.

Interstate transactions

An agreement may be dutiable in Queensland even if the head office of the business you are buying or some of its clients are located outside the state.

When you buy a business that trades in multiple jurisdictions, the part of the consideration or value that relates to Queensland business assets is dutiable.

See sections 26 and 27 of the Duties Act for more information.

Also consider…

• Read the public ruling about the residence of a company for transfers of business assets (DA035.1).
• Find out more about when transfer duty applies.
• Learn about who pays transfer duty.