NSW Government has again deferred the abolition of
duties that were due to be abolished in New South Wales on 1 July
Abolition of NSW duties deferred again
The NSW Government has indicated that the abolition of
Inter-Governmental Agreement taxes, including duties on:
marketable securities (shares and units)
non-land business assets
that were due to be abolished in NSW effective on 1 July 2013,
is "temporarily" deferred.
Implementation of the abolition of stamp duties has been
deferred in NSW on a number of previous occasions, and the NSW
Government will first need to pass legislation to amend the
relevant provisions of the Duties Act 1997 to effect the deferral
beyond 1 July 2013. At this time, this amending legislation has not
been passed and no deferral date has been announced.
On 23 April 2013, the NSW Premier announced that the NSW
Government had agreed with the Federal Government to implement the
Gonski national education reforms, which has secured additional
Federal Government funding of AUD5 billion for NSW schools.
Tucked away within this announcement was the reference that the
abolition of stamp duties in NSW will be "temporarily"
deferred as a means to help fund NSW's AUD1.7 billion share of
the costs of the education reforms. Click here to view the
announcement in full.
The Inter-Governmental Agreement signed by the Federal and State
Governments in 1999 which established the framework whereby Goods
and Services Tax (GST) revenue would be collected by the Federal
Government and allocated amongst the States and in return, the
States each agreed to abolish specifically identified taxes and
duties continues. As a consequence, the abolition of stamp duties
in NSW must theoretically still occur – it is only a timing
Impact for clients
Few details have been provided about this most recent deferral
of duty and K&L Gates will keep you apprised of further
announcements and developments. In the meantime, the continued
deferrals create uncertainty for clients where the ongoing effect
of duties on their transactions and businesses results in more
complexity and cost.
The deferral will affect in particular:
borrowers, as NSW remains the last jurisdiction in Australia to
impose duty on borrowers granting security over property in
clients involved in transactions involving the transfer of
marketable securities (shares and units) in NSW or the transfer of
businesses in NSW.
Consideration should be given to the jurisdiction in which new
companies are registered. There is no marketable securities
transfer duty now imposed on the transfer of shares in companies
incorporated in any jurisdiction other than NSW.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The article discusses the legislative requirements and then provides some comments on common mistakes made by caveators.
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