Partnerships and transfer duty

You must pay transfer duty on certain transactions that affect partnerships that hold dutiable property. For example, if you acquire a partnership interest in a partnership that holds land in Queensland, you must pay transfer duty.

Acquiring a partnership interest

You can acquire a partnership interest when:

  • a partnership is formed
  • the members of a partnership change
  • 2 or more partnerships merge
  • your interest increases under the terms of the partnership agreement.

Example

Three people are partners in a business. Their partnership holds dutiable property, including the land on which they operate their business. One partner retires from the partnership and his interest passes to the remaining members.

The remaining partners are both acquiring a partnership interest. Transfer duty is charged on their increased interest in the partnership.

Determining the value of your partnership interest

To work out the value of your partnership interest, apply the percentage of your interest in the partnership to the unencumbered value of the dutiable property, including indirect interests, held by the partnership.

Your partnership interest may be any of the following values:

  • the percentage of the value of your entitlement
  • the profit-sharing percentage that you acquired when you became a partner or when your interest in the partnership increased
  • the percentage of the partnership capital that you contributed or are obliged to contribute - whichever is greater
  • the percentage of the partnership losses that you will carry.

Don't include the value of any dutiable property you contributed to the partnership when it was formed.

If your partnership interest increases, transfer duty applies to the increase only.

Calculating duty

To calculate duty on a partnership acquisition, use the transfer duty rates on the higher of the:

  • consideration for the partnership acquisition (to the extent that it relates to dutiable property)
  • value of the partnership interest.

A family business concession is available for some transactions involving family partnerships.

Lodging the documents

If you enter into a dutiable transaction involving a partnership interest, you must have the relevant documents assessed for transfer duty and stamped.

You need to lodge the following documents with the Office of State Revenue within 30 days of the transaction documents being signed.

  • For dutiable transactions on formation of a partnership:
    • the partnership agreement
    • a dutiable transaction statement (Form D2.2)
    • an identity details annexure for each non-Australian transferor and transferee, when transferring real property (e.g. houses, apartments, business premises and vacant land)
    • a valuation for any dutiable property that is acquired by a partner
    • a covering letter
      • advising if any of the partners are acquiring dutiable property previously owned by one of the other partners (for example, land or plant and equipment)
      • outlining the documents you have lodged, your name and return address.
  • For other dutiable transactions involving a partnership:
    • the original partnership agreement
    • details of the partners, their respective shares and arrangements for profit sharing and distribution of assets when winding up (if a partnership agreement has not been executed)
    • a dutiable transaction statement (Form D2.2)
    • an identity details annexure for each non-Australian transferor and transferee, when transferring real property (e.g. houses, apartments, business premises and vacant land)
    • balance sheets of the partnership before and after the transaction
    • a valuation of all the assets of the partnership (including goodwill), supported by financial statements for the previous 3 years
    • details of any liabilities being taken over
    • a covering letter outlining the documents you have lodged, your name and return address.

If you apply for the concession on an acquisition in a family partnership, you need to also lodge a family business concession claim (Form D2.5).

Find out more about lodging documents for an assessment of transfer duty.

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.