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:
- intra-group transfers of property
- landholder duty.
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.
- Intra-group transfers of property
- Form D10.2 Corporate reconstruction - Intra group transfers
- Form D2.2 Dutiable transaction statement (for completed transactions)
- Interposition of a new parent company between the existing company and its shareholders (for proposed and completed transactions)
- Form D10.1 Corporate reconstruction - Interposing company (for applying for a ruling or claiming the exemption)
- Relevant acquisition in a landholder
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 firstname.lastname@example.org.
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.
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 email@example.com 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
- Read Part 1, Chapter 10 of the Duties Act to learn more about exemptions for corporate reconstruction.
- Last reviewed: 06 Sep 2018
- Last updated: 06 Sep 2018