Transfer duty (also known as stamp duty or transfer tax) varies significantly from state to state. As a result, the impact on a major transaction can differ widely depending on where assets, entities, or family members are located. Engaging a business accountant who understands how transfer duty interacts with tax, structuring, and succession planning can make a material difference to the net outcome for your family.
The way a transaction is structured can significantly alter its transfer duty outcome. For this reason, tax structuring must always consider stamp duty implications as part of long-term strategy.
Frequently used at Westcourt due to transfer duty and capital gains tax benefits. Units in a unit trust holding real estate under $2 million can often be transferred between family members without triggering transfer duty.
Holding property outside the trading company can assist with business succession and reduce future stamp duty exposure.
Structuring assets early can avoid unnecessary duty costs when businesses or interests transition between generations.
Engaging tax advisors with an appreciation of stamp duty across Australia are also relevant for providing goods and services tax. For many advisors GST is seen as a short-term financing transaction only. If GST is paid in one quarter, the ATO will refund the same GST in a subsequent quarter. However, that approach will overlook the stamp duty impact of a GST free transaction – stamp duty applies to GST and it can quickly become significant on buying real estate or a business. So, at Westcourt, our focus on legitimately structuring transactions to enjoy a GST exemption is often done, in part, to ensure that a lower overall cost of transfer duty is paid.
Another situation can be seen with the closure and creation of a discretionary trust. In exceptional cases, a discretionary trust can be shut down. The assets held within that discretionary trust, including real estate, can be transferred to the beneficiaries and enjoy a transfer tax free transfer. This same transfer duty outcome might also be appreciated if the asset is transferred to a self-managed super fund (with detailed advice attached to that position).
What is essential is that transfer duty does not exist by itself and coaching transfer duty applications, with the guide of a lawyer, is critical to execution of transfer tax strategy.
At Westcourt, we have one single focus – making family-owned businesses great. Our single market approach, proven level of holistic tax excellence including transfer tax, and national reach with the GGI network make us the natural choice for becoming your primary trusted advisor when looking at your tax affairs now and moving forward.
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