Stamp Duty:

Taxation is a substantial matter for any individual or business which requires knowledge, planning and strategy. It is fundamental to have a tax compliant and effective structure for profit maximisation and the minimisation of administrativeand reporting costs and time. Stamp Duty is one form of tax and it is a tax imposed by states and territories on various transactions either at a fixed rate or at an ‘ad valorem’ rate on the value of the transaction. Most of us are familiar with the stamp duty applicable when purchasing a property however, stamp duty is applicable to all transfers of ‘dutiable property’ and this is quite a broad term. An experienced Taxation Lawyer may have regard to your factual circumstance to ensure that you comply with all applicable taxes and that you optimise your taxation strategy.

Stamp duty is imposed on a number of items classified as ‘dutiable property’. This includes land, floor space, a land use entitlement, certain shares in unit trust schemes, the goodwill of a business, certain intellectual property, certain statutory licences, a partnership interest, goods if they are the subject of an arrangement that includes a dutiable transaction and options to purchase land.  The following transactions in relation to dutiable property are also potentially dutiable; agreements for sale or transfer, declarations of trust, surrenders of interests in land, foreclosures of mortgages and vesting of dutiable property by, or as a consequence of, a court order. Evidently, stamp duty is a complex area of taxation law and whether your are investing, conducting business, or acquiring property there may be a number of stamp duty implications that you may not be fully aware of or informed about. A consultation with a specialised Taxation Lawyer can be immensely rewarding in this regard to ensure accurate compliance is achieved and unnecessary penalties are not incurred.

There a few general items relevant to stamp duty that all individuals should be aware of. Firstly, stamp duty is payable by the transferee (the purchaser or acquirer of the dutiable property), and it is levied on the higher of the consideration for the dutiable transaction and the unencumbered value of the dutiable property. Also, stamp duty is payable within 3 months of a transfer and this time starts running when the instrument (or contract) is first executed  i.e. when any party signs or seals an instrument regardless of whether the other parties have done so. Stamp Duty is payable on a upward sliding scale, that is lower rates are applicable to dutiable transactions involving shares, units and other securities and higher rates are applicable for higher value dutiable property.  There may be a concession available for certain transfers, for instance first home buyers may have a discount or concession available for the first property they purchase.  It may be immensely informative, useful and helpful to have an experienced tax lawyer assess your financial situation and advise you of your stamp duty obligations and the optimal strategy to deal with this tax in a manner that is most suitable for your needs and goals.

Lastly, failure to comply with stamp duty can have serious implications and penalties. Failure to address your stamp duty obligations may result in harsh fines and penalties. In particular the Commissioner of Taxation has wide ranging powers to nullify and penalise the avoidance of tax or transactions that attempt to evade or defraud the ATO. Our qualified taxation lawyers and financial advisors can consider your situation on a comprehensive level, and may assist in ensuring that you comply with your taxation obligations.

If you need further legal advice on your matter, you may book an appointment with us by telephone on (02) 9233 4048 or by email to info@navado.com.au. 

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