Corporate reconstruction exemption from transfer duty

When a corporate group changes its structure in a corporate reconstruction and transfers property between group companies, it may be considered a dutiable transaction and liable for transfer or landholder duty.

For example, if a parent company transfers a business it owns and its assets to a subsidiary company, this would be liable for transfer duty.

An exemption applies to 3 types of transactions involving a transfer or an agreement to transfer dutiable property between group companies:

• intra-group transfers of property
• trustees
• landholder duty.

Applying for an exemption

A corporate group seeking an exemption from the duty otherwise payable on a dutiable transaction or a relevant acquisition must apply in writing to the Commissioner of State Revenue.

For the following corporate reconstruction transactions, you will need to complete the forms listed.

• Intra-group transfers of property
  • Form D10.2 Corporate reconstruction—Intra-group transfer
  • Form D2.2 Dutiable transaction statement (for completed transactions)
• Interposition of a new parent company between the existing company and its shareholders (for proposed and completed transactions)
  • Form D10.1 Corporate reconstruction—Interposing company (for applying for a ruling or claiming the exemption)
• Relevant acquisition in a landholder
  • Form D10.2 Corporate reconstruction—Intra-group transfer
  • Form D3.3 Landholder duty statement

When applying for a ruling or claiming an exemption, you should also include:

• information about the purpose of the transaction and any related transactions
• information about how the group has provided the consideration for the transaction (e.g. through an intercompany loan)
• a diagram of the corporate structure
• a copy of the ASIC company extract (or equivalent)
• a certified copy of the foreign company share register (if applicable), certificate of incorporation or company constitution.

Form D10.2 includes a guide that will help you complete the form and lists the documents required by the Commissioner to determine an exemption.

How to lodge

Send the executed documents with your application for an exemption to:

GPO Box 2593
Brisbane  QLD  4001.

Alternatively, for a proposed transaction (where a ruling from the Commissioner is required), you can lodge your application by sending it to duties@treasury.qld.gov.au.

After we have received your application, we will:

• send you a confirmation notice with a file reference number
• process it within 30 business days (there is no urgent service because of the technical nature of these transactions)
• notify you of our decision in writing.

Your obligations

If you are granted an exemption on an assessment of duty on a dutiable transaction or a relevant acquisition, you must notify us by lodging a completed notice for reassessment—corporate reconstruction exemption (Form D10.3) within 28 days if either of the following happens within 3 years of the transaction or acquisition occurring:

• the companies that are parties to the transaction do not remain group companies
• part or all of the consideration for the transaction is provided or received by a person other than a group company.

There are exceptions to this requirement, which are set out under section 412(4) of the Duties Act 2001.

Contact us on 1300 300 734 or email duties@treasury.qld.gov.au if you need more information.

Corporate groups and reconstructions

In this example of a corporate group:

• Company A is the parent company (as per section 401 of the Duties Act) of Company B because Company A directly owns 90% of Company B’s shares and has voting control.
• Company B is the parent company of Company C because Company B directly owns 90% of Company C’s shares and has voting control.
• Company A is not the parent company of Company C because Company A does not directly own 90% of its shares.
• Company B is the subsidiary (section 402 of the Duties Act) of Company A because Company A directly owns Company B’s shares.
• Company C is the subsidiary of Company B and, because Company B is the subsidiary of Company A, Company C is also a subsidiary of Company A.
• Companies A, B and C are considered group companies and together form a corporate group (section 400 of the Duties Act).

Common reasons for corporate reconstructions

• Aligning business operations with the relevant legal entity
• Improving the balance sheet of a subsidiary seeking finance
• Responding to structural changes by a foreign parent company
• Removing expensive, antiquated structures in complex groups
• Merging business operations and legal entities following a takeover
• Preparing for a public float

Also consider…

• Read Part 1, Chapter 10 of the Duties Act to learn more about exemptions for corporate reconstruction.