We are pleased to confirm that the NSW Government has finally passed changes to stamp duty. As of 1 July 2016. NSW stamp duty on transfers of business assets, unlisted marketable securities and mortgages has finally been abolished. Transactions relating to land will still attract stamp duty unfortunately which includes transfers of land-rich entities and landholder duty.
From 1 July 2016 NSW stamp duty will no longer be payable on:
- transfers of marketable securities – including shares in private companies and units in unit trusts (assuming land rich duty does not apply)
- transfers of business assets including goodwill and intellectual property and plant and equipment when part of a transaction which includes goodwill (excluding land, certain goods e.g. when associated with land and not stock-in-trade)
- mortgages executed after 1 July 2016 (nominal duty if executed prior to 1 July with the initial advance made after that date)
- transfers of statutory licences and permissions and gaming machine entitlements
- company charges and security agreements.
For individual investors the benefits will largely be limited to unlisted shareholdings because transfers of listed shares is already free of stamp duty and the application of stamp duty to transfers of land remains unchanged. However the removal of stamp duty on mortgages will be a welcomed change!
Overall these changes will make a range of restructures of businesses and other entities more attractive and will provide significant savings for business sales. To find out what the changes mean for you, please speak with your Prosperity adviser.