|Ruling number||SD 074|
|Date issued||12 November 1987|
|Issued by||AD Clyne|
Chief Commissioner of Stamp Duties
|Effective from||12 November 1987|
See s.8(1)(b)(iii) of the Duties Act
A surrender of lease falls within the definition of conveyance (found in section 65 of the Stamp Duties Act 1920) and therefore will be liable to stamp duty as a conveyance.
This Ruling sets out the principles applied to the assessment of surrenders of leases.
In the assessment of conveyances generally, the Stamp Duties Division will not request evidence of value of the property conveyed where there is no transferor/transferee relationship and where there is an expressed consideration in the conveyance.
In these instances, stamp duty is assessed on the consideration paid by the transferee, unless other factors are apparent which give rise to doubts about the adequacy of consideration expressed. In those cases, appropriate enquiries are made to verify the adequacy of consideration.
These general principles apply to surrenders of leases. However, the following factors are relevant to the value of the unexpired portion of the lessee's interest in a lease:
The existence of any of these factors, suggesting inadequacy of consideration, may lead to the value being tested on enquiry by the Stamp Duties Division. Practitioners should be alert to the need to furnish information to support an assessment being based on the consideration expressed, where the terms of the lease suggest otherwise. This information should be furnished at the time of lodgment of the surrender document.
Where there is no consideration passing between unrelated parties a surrender of lease generally will be liable to duty of $10 unless factors are present to suggest that the unexpired portion of the lease has a material value. In these circumstances, evidence of value may be required.