Corporate reconstruction exemption from transfer duty

When a corporate group changes its structure in a corporate reconstruction and transfers property between group companies, it may be considered a dutiable transaction and liable for transfer duty.

For example, if a parent company transfers a business it owns and its assets to a subsidiary company, this would be liable for transfer duty.

An exemption applies to 3 types of transactions involving a transfer or an agreement to transfer dutiable property between group companies:

Applying for an exemption

A corporate group seeking an exemption from the duty otherwise payable on a dutiable transaction or a relevant acquisition must apply in writing to the Commissioner of State Revenue.

For the following corporate reconstruction transactions, you will need to complete the forms listed.

When applying for a ruling or claiming an exemption, you should also include:

  • information about the purpose of the transaction and any related transactions
  • information about how the group has provided the consideration for the transaction (e.g. through an intercompany loan)
  • a diagram of the corporate structure
  • a copy of the ASIC company extract (or equivalent)
  • a certified copy of the foreign company share register (if applicable), certificate of incorporation or company constitution.

How to lodge

Send the executed documents with your application for an exemption to:

GPO Box 2593,
Brisbane  QLD  4001.

Alternatively, for a proposed transaction (where a ruling from the Commissioner is required), you can lodge your application to cr@treasury.qld.gov.au.

After we have received your application, we will:

  • send you a confirmation notice with a file reference number
  • process it within 30 business days (there is no urgent service because of the technical nature of these transactions)
  • notify you of our decision in writing.

Your obligations

If you are granted an exemption on an assessment of duty on a dutiable transaction or a relevant acquisition , you must notify us by lodging a completed notice for reassessment - corporate reconstruction exemption (Form D10.3) within 28 days if either of the following happens within 3 years of the transaction or acquisition occurring:

  • the companies that are parties to the transaction do not remain group companies
  • part or all the consideration for the transaction is provided or received by a person other than a group company.

There are exceptions to this requirement, which are set out under section 412(4) of the Duties Act.

Contact us on 1300 300 734 or email cr@treasury.qld.gov.au if you need more information.

Corporate groups and reconstructions

Example of a corporate group

In the example above:

  • Company A is the parent company (as per section 401 of the Duties Act 2001) of Company B because Company A directly owns 90% of Company B’s shares and has voting control.
  • Company B is the parent company of Company C because Company B directly owns 90% of Company C’s shares and has voting control.
  • Company A is not the parent company of Company C because Company A does not directly own 90% of its shares.
  • Company B is the subsidiary (section 402 of the Duties Act) of Company A because Company A directly owns Company B’s shares.
  • Company C is the subsidiary of Company B and, because Company B is the subsidiary of Company A, Company C is also a subsidiary of Company A.
  • Companies A, B and C are considered group companies and together form a corporate group (section 400 of the Duties Act).

Common reasons for corporate reconstructions

  • Aligning business operations with the relevant legal entity
  • Improving the balance sheet of a subsidiary seeking finance
  • Responding to structural changes by a foreign parent company
  • Removing expensive, antiquated structures in complex groups
  • Merging business operations and legal entities following a takeover
  • Preparing for a public float

Also consider…

Contact

Office of State Revenue

  • Call 1300 300 734 (Australia) or
    +61 7 3179 2500 (overseas)
  • Send an email using our online enquiry form.