|Ruling number||DUT 008|
|Date issued||1 July 1998|
|Issued by||B Buchanan|
Chief Commissioner of State Revenue
|Effective from||1 July 1998|
Chapter 2 of the Duties Act 1997 imposes duty on dutiable transactions concerning dutiable property. A vesting of dutiable property by or as a consequence of a statute or a court order is a dutiable transaction (section 8 (1) (v)).
The vesting of dutiable property by statute could extend to the creation of property, and not merely the transfer of that property. The imposition of duty on such transactions is not subject to duty under the Stamp Duties Act 1920, and is not intended under the Duties Act.
A statutory licence or permission under a New South Wales law is dutiable property (section 11 (h)). Licences under the Liquor Act 1982 are therefore dutiable property. However, the licensing laws can, in some instances, result in the transfer or vesting by court order of a liquor licence without a change in the beneficial ownership of the licence. The imposition of duty on such transactions is also unintended.
The Treasurer has approved a Variation to Statute in relation to the above transactions.
With effect from 1 July 1998, the Treasurer has approved the administration of the Duties Act 1997 on the basis that a vesting by or as a consequence of a statute is not a dutiable transaction. This approval will operate until such time as an appropriate amendment is made to the Act.
Although a vesting of dutiable property by statute is not subject to duty under the Stamp Duties Act, a transfer as a consequence of or to give effect to such a vesting could be dutiable in some circumstances as a conveyance. Similarly, a transfer of dutiable property as a consequence of a vesting by statute will still be a dutiable transaction under the Duties Act.
In the case of a specific vesting by statute, such as under legislation providing for the merger of 2 or more organisations, the legislation often provides an exemption from taxes payable as a result of the merger, including any duty payable on transfers of property. It is appropriate that such exemptions are considered on a case by case basis.
In the case of a general vesting by statute, such as under the Wills Probate and Administration Act 1898 or the Liquor Act 1982, any subsequent transfer of existing dutiable property is a dutiable transaction, although only nominal duty will be payable in many instances.
The change of ownership of a liquor licence is accomplished by application to the Licensing Court. This would constitute a dutiable transaction, either as a "transfer" or as a "vesting by or as a consequence of a court order".
With effect from 1 July 1998, the Treasurer has approved the administration of the Duties Act 1997 on the basis that a transfer or vesting by court order of a liquor licence pursuant to sections 41, 42 or 61 of the Liquor Act 1982 is exempt from duty if the Chief Commissioner is satisfied that there is no change in beneficial ownership, nor contemplation of a change in the beneficial ownership, of the liquor licence as a result of the transfer or vesting. This approval will operate until such time as an appropriate amendment is made to the Act.
If a sale of business or other dutiable transaction results in a change in the beneficial ownership of the licence, ad valorem duty would be payable. However, the Variation to Statute also includes approval to exempt a transfer or vesting by court order of a liquor licence as a consequence of an agreement for sale or transfer of dutiable property on which the duty payable in respect of the agreement has been paid. This exemption will extend to a licence transferred or vested in a person other than the purchaser under the agreement, provided the beneficial interest in the liquor licence is or shall be held by the purchaser.
Note that other orders of the Licensing Court which effect a change to or variation of the conditions attached to a licence are not subject to duty, as they do not constitute a transfer or vesting by court order of dutiable property.