I recall sometime ago a commercial developer used a tactic to avoid stamp duty when buying a property, by buying the vendor’s shelf company specifically set up to acquire the property.
The new owner of the shelf company then became the legal owner of the property.
Is anyone else aware of pitfalls of this strategy?
If you are buying a company you still need to get the share transfer stamped. Believe that the Stamping office has the option of picking a higher rate if the company’s main asset is property.
If a developer has a trick it is not as simple as this.I asked a good account (Dale GG) about this a few years ago, and he said this still wouldn’t get around avoiding stamp duty. He didn’t really elaborate, so I am not sure on the details.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Possibly the details are not as portrayed.
What kind of property was involved ?(i.e. vacant land ? An existing property ? )
Was it the vendor’s shelf company or perhaps the developer’s shelf company that was involved in the transaction ?
Was the property owned by the shelf company or did the company merely hold an option on the land ?
Pisces133
I think that it ‘used to’ work, but now if more than 50% of the company’s shares are transferred you pay stamp duty on the value of all assets.
I think Somersoft forum has discussed this a few times.
Cheers
MelI believe the property was a going concern of 30 townhouses under dev’t in Brisbane that the vendor wanted to get out of a third of the way through due to delays and cash flow problems. A third of the townhouses had already been completed and sold off. It was the vendor’s shelf company that was sold to the buyer.
Bruce
Mooloolaba, Qld
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