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Corporate reconstructions and consolidations

The information within this guide is of a general nature and aims to centralise key information on corporate reconstructions and consolidations and provides industry professionals the legislative and operational requirements under the Duties Act 1997.

It is recommended that the guide is read in its entirety and in conjunction with part 1 of chapter 11 of the Duties Act 1997.

Contact us if you require further information or to discuss specific transactions.

Chapters

  1. Overview
  2. What is a corporate group?
  3. Reduction in duty for corporate reconstructions
  4. Reduction in duty for corporate consolidations
  5. Applications for reduction in duty
  6. Lodgement and payment of duty
  7. Definitions

3. Reduction in duty for corporate reconstructions

Section 273B of the Duties Act 1997 (NSW) provides for a reduction in the duty payable on certain transactions between members of a group of corporations.

This Section applies when:

  1. the transaction is a corporate reconstruction transaction, and
  2. the transaction, or the series of transactions is undertaken for the purpose of
  3. the Chief Commissioner is satisfied that
    • it was not undertaken for a purpose of avoiding or reducing duty under the Duties Act on another transaction, and
    • is not undertaken for the sole or dominant purpose of avoiding or reducing a liability for tax, other than duty under the Duties Act, under a law of an Australian jurisdiction.

Eligible corporate reconstruction

An eligible corporate reconstruction transaction means any of the following transactions:

  • A transfer, or agreement for sale or transfer of dutiable property between members of the same corporate group.
  • A surrender of an interest in land by a corporation to a corporation who is a member of the same corporate group.
  • A vesting of dutiable property if the dutiable property was held, immediately before the vesting, and continues to be held, immediately after the vesting by corporations who are members of the same corporate group.
  • An acquisition of an interest in a landholder (within the meaning of Chapter 4) by a corporation if the interest is acquired from another corporation who is a member of the same corporate group
  • An application to register a motor vehicle as a result of a transfer of the vehicle between corporations who are members of the same corporate group.

Read more in Section 273C of the Duties Act 1997

A ‘corporate reconstruction transaction’ does not extend to a declaration of trust, foreclosure or enlargement transactions, even if between members of a corporate group.   A declaration of trust cannot obtain an exemption from ad valorem transfer under duty section 273B(1)