Stamp duty has been a significant barrier to business owners wanting to restructure their business assets. There were many instances where the costs of transferring from one business entity into another (e.g. from a sole trader or partnership to a trust or company structure) were prohibitive because of the amount of stamp duty that was involved. From 1 July eligible transfers of business assets will be exempt from stamp duty.
The stamp duty exemption does not apply to business assets that are real property or land. For example, if a business owns a factory which forms part of a sale, the land or real property component of the assets still attract stamp duty on the transfer value.
Clients will require appropriate accounting and legal advice before transferring any assets. Transfers may still trigger capital gains tax considerations as well as other related issues. These should be carefully considered before any change is made. This type of restructuring is typically done to take advantage of a more effective tax environment and also to consider asset protection issues.
For advice on this change, business structures or asset protection more generally please contact us on (02) 9908 9888.