Transfer of shares or units duty
Duty on the transfer or declarations of trust on marketable securities (shares and units), including commercial fishery shares, is abolished from 1 July 2016.
Duty is charged on the transfer of non-listed shares in a New South Wales (NSW) company or units in a unit trust scheme, being units:
registered on a register kept in NSW
that are not registered on a register kept in Australia, but in respect of which the manager (or, if there is no manager, the trustee) of the unit trust scheme is a NSW company or is a natural person resident in NSW.
What is a NSW company?
A NSW company means a company incorporated, or taken to be incorporated under the Corporations Act 2001 (Cth), that is registered in NSW for the purposes of that Act, or any other body corporate that is incorporated under an Act of NSW.
What is a unit in a unit trust scheme?
A unit in a unit trust scheme means:
a right or interest (whether described as a unit or a sub-unit or otherwise) of a beneficiary under the scheme, or
a right to any such right or interest.
What is the current rate of duty?
Duty is charged at 60 cents per $100, or part of $100, of the dutiable value of the shares or units.
A minimum duty of $10 per transfer applies.
Note: General transfer rate of duty will apply instead if the transfer of shares or units confers land use entitlement. Land use entitlement means an entitlement to occupy land within NSW conferred through an ownership of shares in a company or an ownership of units in a unit trust scheme, or a combination of a shareholding or ownership of units together with a lease or licence.
Landholder duty may also apply if the company or unit trust owns land in NSW with a threshold value of $2 million or more.
Who is liable to pay the duty?
The transferee is liable to pay the duty.
What is the dutiable value?
The dutiable value is the greater of the market value or consideration paid for the shares or units.
What are dutiable transfers?
Duty is charged on the following transactions:
transfer of units in a unit trust scheme
transfer of units in a managed fund eg Colonial First State
transfer of shares in a private company
transfer of shares in an unlisted public company
allotment of shares by direction
capital reductions or rights alterations.
Allotment of shares by direction
Duty is payable whenever a NSW company allots shares to a person at another person’s direction, to cancel a previous obligation to that person, whether that obligation arises as a consideration for the purchase of property by the company or otherwise.
You must submit a Statement: Allotment of Shares by Direction (OSD069) with the duty to us within three months of the date the shares or units are allotted.
Capital reductions or rights alterations
Duty is payable on capital reductions or rights alterations:
if a person becomes entitled to at least 50% of the voting shares of a company by means of a capital reduction and/or rights allocation
if a person who is entitled to at least 50%voting shares of a public unlisted company becomes entitled to at least 10% more of the voting shares over a period of not more than 12 months by mean of a capital reduction and/or rights alteration.
You must submit a Statement: Entitlements Arising from Capital Reductions or Rights Alterations (OSD 070) with the duty payable to us within three months of receipt of the entitlement.
What is a capital reduction?
A capital reduction occurs with:
the redemption, surrender or cancellation of a share (including cancellation as part of a buyback of shares in accordance with the Corporations Law
a reduction in the paid value of a share.
What is a rights alteration?
A rights alteration, in relation to voting shares, means a variation, abrogation or alteration of rights relating to the shares.
Exemptions and concessions
Not liable to duty
Duty is not payable and stamping is not required on the following transactions:
Shares or units in a unit trust scheme that are quoted on the Australian Stock Exchange (ASX) or a recognised stock exchange.
An interest in shares or units referred above, whether or not the interest is quoted on the ASX or a recognised stock exchange.
Duty is not payable but stamping is required on the following transactions:
transfer of shares or units as consequence of break-up of marriage, break-up of de facto relationship and break-up of domestic relationship
transfer of mining shares.
Maximum duty payable is $50 and stamping is required on the transfer of shares or units to beneficiaries under the terms of the will of a deceased person or arising on intestacy.
Note: Please ring 1300 139 814 to discuss requirements for exemptions and concessions.
What do I need to lodge?
When lodging your transfer of shares or units, you should provide the duty payable (a minimum of $10 per transfer applies) and either:
audited financial statements of the relevant company or unit trust, including a certified copy of the latest balance sheet (including 'notes') and profit and loss statement for the last five years, or
a valuation of the relevant shares or units, or a statement by one of the parties as to how the valuation was determined. A balance sheet and supporting notes are still required.
A Statement of Dutiable Transaction not Effected by a Written Instrument (OSD 046) must be lodged if no written instrument is affecting the transfer of shares or units.