Hi All,
This is a hypothetical question.
Let's say you set up a company and buy a number of IP's in the name of the company.
Some time down the track, you sell the company and all its assets (which includes the IPs).
What are the stamp duty implications, if any? Since the properties are not changing owners (the company still owns them), then there would be no stamp duty payable on them in this case, yes?
Even if stamp duty was payable on the sale of the company, the valuation method for the company may result in this collection of properties changing hands at a much lower face value than the value of the properties owned by the company (eg there may be significant debt over the properties).
For example, let's say the company has property worth $1M and debt of $800K. The net asset value would be $200K. The company value would probably be based on that, plus consideration for future income etc. Whatever the case, you would expect the stamp duty on this to be much less than the stamp duty on $1M of property.
This would also seem to be a way to tranmute the CGT impact as well.
Thoughts?
Daedalus.
Transfer duty on share trasnfers is a state based tax, so things will vary from state to state. Your best point of research would be the office of state revenue in each state. I think you will find that in some states you will be able to avoid stamp duty on the transfer as long as your company would not be classified as being "land rich". In NSW it was around $1mil in value before the land rich limit kicked in – this was a few years ago too. I don't beleive the debt on the land was taken into account either.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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