Under newly revised legislation which took effect earlier this year, eligible small businesses can now restructure from trading discretionary trusts to trading companies, gaining access to a Stamp Duty Exemption in Queensland.
Under the legislation, the relief granted allows greater flexibility for businesses with less than $5 million turnover to restructure their entity and will apply to restructures on or after 28 June 2021, that involve a transfer of assets from a Discretionary Trust to a Company structure that the trustee is the sole shareholder of.
What is the Eligibility Criteria to access the Relief?
To be eligible for the exemption, the following criteria must be met:
| Sole Trader | the individual owner must be a shareholder of the company |
| Partnership | all partners must be shareholders of the company |
| Discretionary Trust | all beneficiaries must be shareholders of the company. If the shares are to be held by the Trust, the Trustee must be the sole shareholder and all beneficiaries of the Trust must remain the same. |
Your business might be eligible for the Stamp Duty relief in Queensland, if the following conditions are met:
- the businesses’ turnover is less than $5 million or the small business property equals this value criteria;
- operate or located in Queensland;
- the Trust asset being transferred has a value of no more than $10 million;
- the new trading Company is newly registered, or has been dormant since registration;
- the shareholder of the new Company is an eligible ‘beneficiary’ for the current trading Trust
Additionally, the restructure relief will apply via a full or partial exemption, if:
- ownership levels both before or after the restructure remains the same;
- the trustee is the sole shareholder of the company, and the rights & interests of the beneficiaries of the trust immediately before and after the restructure remains the same.
A partial exemption may apply if the existing owners retain ownership but change ownership levels or introduce new owners.
How do I claim the Exemption?
To claim the exemption, you must send the following documents to the Office of State Revenue:
- a covering letter setting out ownership level both pre- and post-restructure.
- a copy of your latest full-year Financial Statement.
- any Agreements or Transfer documents.
- a completed 'Dutiable Transaction Statement' (Form D2.2) claiming Exemption #58 at Question 14.
- completed 'Vehicle Registration Transfer Application' (F3520 to claim the vehicle registration duty exemption.
For More Information
For more information on eligibility and the process of claiming the Stamp Duty relief, please contact the Archer Gowland Redshaw office on (07) 3002 2699 | info@agredshaw.com.au
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