On 1 July 2016, certain Stamp Duties are to be abolished in New South Wales.
Firstly, mortgages executed on or after 1 July 2016 will not be liable to payment of Stamp Duty.
Further, any advances made on a pre-existing agreement after 1 July 2016 will not be subject to the imposition of Stamp Duty.
Secondly, Stamp Duty on a large number of business assets will also be abolished. Whilst this abolition has been promised for many years, it looks like this is the year where it will be removed.
The types of business assets which will cease to be subject to Stamp Duty include the goodwill of a business, a business’s intellectual property, statutory licences or permissions (for example, a taxi licence) and duty on gaming machine entitlements.
Stock in trade is already exempt from Stamp Duty.
There are some anti-avoidance measures. If an agreement was entered into prior to the 1 July which is subsequently replaced with an agreement after 1 July, then the transaction is still subject to payment of Stamp Duty.
Further, if a transaction has been entered into after 1 July 2016 as a result of an Option Agreement entered into prior to that date, then the Stamp Duty is still payable.
But wait there is more. As and from 1 July 2016 the government will also cease charging Stamp Duty on the Transfer of Shares in a New South Wales Company and on units in a Unit Trust Scheme registered in New South Wales.
Stamp Duty is best known as a tax which is paid by them when they purchase land and improvements.
Unfortunately, there appears to be no plans to abolish or reduce the rate of Stamp Duty payable on land transactions in New South Wales.
If you are planning to do a transaction involving a mortgage or purchase of a business or the transfer of shares or units in a trust, it may be advantageous to wait until after 1 July 2016.
If you have questions regarding Stamp Duty, we can at Everingham Solomons, provide the answers, because Helping You is Our Business.
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