Stamp duty is a tax imposed by Australian state and territory governments on the purchase of assets. Each government has different stamp duty legislation, so it is important to understand stamp duty for a sale of business in your relevant state or territory. In most cases, the purchaser pays stamp duty. Therefore, to determine if stamp duty applies to the business you are purchasing, you should obtain taxation advice from an experienced lawyer or accountant. This article gives a brief overview of how each state and territory imposes stamp duty for a sale of business.
New South Wales
In NSW, stamp duty falls under the Duties Act 1997 (NSW) and is the responsibility of Revenue NSW. On 1 July 2016, NSW abolished stamp duty for a sale of business assets (other than real property business assets). However, a nominal duty may still be payable if the business sale includes a transfer of lease and goods. The nominal duty payable is $10.00 on the sale of business agreement, transfer of lease and duplicate sale of business agreement.
Stamp duty is generally due within three months of the relevant transaction (for example, the transfer or agreement to transfer dutiable property) at the relevant rate.
Stamp duty in Queensland applies to business sales and falls under the Duties Act 2001 (QLD). The Office of State Revenue Queensland is the responsible authority. In QLD, stamp duty is payable on dutiable property, which includes all business assets except:
business transfers solely involving debts; and
transfers of a supply right, or intellectual property.
The purchaser will have to pay stamp duty when they sign the transfer agreement. The stamp duty is generally payable within 30 days, at the relevant rate.
Under the Duties Act 2000 (VIC), stamp duty is not charged on the transfer of business assets (other than real property), and there is no nominal fee on the sale of business agreement, as there is in NSW. The State Revenue Office Victoria is the responsible authority for all stamp duty enquiries in the state.
Liability for stamp duty for a sale of business arises when the relevant dutiable transaction occurs and is payable within 30 days at the relevant rate.
In Western Australia, stamp duty is payable on the sale of business assets, including goodwill and intellectual property. The Duties Act 2008 (WA) is the relevant legislation outlining the requirement to pay stamp duty and the responsible authority is State Revenue – Department of Finance (WA).
You have to pay stamp duty once exchange of business assets has occurred. The stamp duty is payable within one month of the date of the assessment notice issued by the responsible authority at the relevant rates.
Under the Stamp Duty Act 1978 (NT), stamp duty is payable on business asset sales except the following:
stock-in-trade (trading stock);
manufacturing materials and work in progress manufacturing goods;
motor vehicles; and
If you are selling your business in the NT, your sale of business agreement should be lodged with the Territory Revenue Office to assess the stamp duty payable on the sale.
After the sale of business agreement has been signed by the parties, stamp duty is payable within 60 days at the relevant rate.
Australian Capital Territory
There is no stamp duty or nominal fee payable on a sale of business in the ACT. The only exception is for real property assets. The ACT Revenue Office is the responsible authority for all duty enquiries in ACT. Stamp duty is generally payable within 90 days of the relevant agreement at the relevant rate.
In SA, stamp duty falls under the Stamp Duties Act 1923 (SA). On 18 June 2015, SA abolished stamp duty on all sale of business agreements signed after that date. There is no nominal fee applicable either. However, stamp duty will still apply on the transfer of land or a motor vehicle that is included as part of the sale of the business. Revenue SA is the responsible authority for all stamp duty enquiries in SA. Stamp duty is generally payable within two months of the relevant transaction at the applicable rates.
Stamp duty in TAS falls under the Duties Act 2001 (TAS). In 2008, Tasmania removed duty on all assets in a sale of business except the transfer of land. There is no nominal fee payable on the transfer either. The responsible authority for all duty enquiries is the State Revenue Office of Tasmania. Stamp duty for a sale of business is generally payable within three months of the relevant transaction at the applicable rates.
The Ultimate Guide to Selling a Business
When you are ready to sell your business and begin the next chapter, it is important to understand the moving parts that will impact a successful sale.
This How to Sell Your Business Guide covers all the essential topics you need to know about selling your business.
Each business sale is different. Therefore, you should discuss your sale with both your legal advisor and the responsible state or territory authority before proceeding with the sale. It is important to include the appropriate stamp duty clauses in your sale of business agreement.