Exemption for small business restructures
You may be able to apply for an exemption from transfer (stamp) duty when you restructure your small business.
Small business owners who restructure their business on or after 7 September 2020 by transferring assets from a sole trader, partnership or discretionary trust structure to a company structure may be eligible for either a full or partial duty exemption on the transfer.
The exemption may also apply to restructures on or after 28 June 2021 that involve a transfer of assets from a discretionary trust structure to a company structure that the trustee is the sole shareholder of.
Eligibility
To be eligible for the exemption as a:
- sole trader, you (the individual owner) must be a shareholder of the company
- partnership, all partners must be shareholders of the company
- discretionary trust, all default beneficiaries must be shareholders of the company. If the shares are to be held by the trustee, the trustee must be the sole shareholder and all beneficiaries of the trust must remain the same.
The exemption doesn’t apply if the assets:
- being transferred have an unencumbered value
of more than $10 million
- are being transferred from an entity with annual turnover of more than $5 million (we may average the turnover for the previous 3 financial years)
- are being transferred to a company that has traded before
- are being transferred between companies
- are being transferred out of a company structure.
The exemption also doesn’t apply to land used as:
- a residence by the transferor
- an investment property held by the transferor which is used to generate income to fund the business.
To determine whether an entity’s turnover is less than $5 million, we will look at their financial statements for the total income received in the income year the restructure occurs. If they own more than 1 business and only 1 of them is being restructured, we will look at the annual turnover for that business only. As an entity’s turnover can fluctuate, we may consider averaging over a 3-year period where appropriate.
Full or partial exemption
A full exemption applies if:
- ownership levels both before and after restructure remain the same
- the trustee is the sole shareholder of the company, and the rights and interests of the beneficiaries of the trust immediately before and after restructure remain the same.
A partial exemption may apply if the existing owners retain ownership but change ownership levels or introduce new owners.
Read Part 1A, Chapter 10 of the Duties Act 2001.
How to claim
Send the following documents to Queensland Revenue Office:
- a covering letter setting out ownership levels both pre- and post-restructure
- a copy of your latest full year financial statements
- any agreements or transfer documents
- a completed dutiable transaction statement (Form D2.2) claiming exemption number 58 at question 14
- completed vehicle registration transfer applications (F3520) to claim the vehicle registration duty exemption.
Email: duties@treasury.qld.gov.au
Post:
Queensland Revenue Office
GPO Box 2593
BRISBANE QLD 4001