I have a question regarding the purchase of property that is currently held in a company structure. If I purchased the whole company from the seller (100% of the shares) will I still have to pay stamp duty on the transfer of the property. I am based in Victoria.
Thank you,
Infinite
Infinite,
I am not 100% sure on this but I think you will find you don’t pay stamp duty on the property but on the share transfer of the company. Given the company still remains the owner of the property but the shares in the underlying company are changing thus stamp duty is payable based on the company’s holdings ie how much cash, how much property etc.
Hopefully other forum members can confirm or give some more incite.
Courage is not acting without fear but acting despite your fear.
Thanks JKM,
do you know whare I could find the rates for company share transfer stamp duty
Infinite
I’ve found some information on the web:
“stamp duty in the State of Victoria on transfers of shares in companies or transfers of units in unit trusts has now been abolished whether public or private vehicles – with the exception of transfers in “land rich entitiesâ€,
Source: http://www.baldwins.com.au/a_bigstamp.phpIt goes on to say “land rich entities” hold over $1,000,000 in unencumbered land holdings in Victoria.
This would be to stop people avoiding stamp duty by previously purchasing shares the company rather than the company directly.
So am I right to say that buying all the shares in a private company holding over $1m in land would still incur stamp duty at the normal rate?
hi Infinite
not sure where this company is registered( you are in vic but is the company registered in vic)(I’m in nsw but have 5 vic companies) I take it as being vic and if this is the case then yes you are correct.
this is not the case for companies in other states I have companies from different states for different reasons and as you post is one of the reasons for vic companies.
as is the case with nz companies they don’t carry capital gains tax which is also an advantage depending on what the company is to be used for.
one thing you will require to do is talk to an account with regard to the purchasing of the shares, as the dot and crosses need to be check so if the ato knock on your door as they would with anybody( there is nothing unusual with the structure you post)you have to explain what has been done and why.
Its called “fun in business” finding these little irregularities between states.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Thanks for that Grossrealisation,
Especially your idea about NZ companies is very interesting.
Infinte
Hi
Any one looking to set up a company in NZ can email me at [email protected].
I am a kiwi and can set one up for you relatively inexpensively andit takes about 3 weeks.
Irish Kiwi
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