The corporate reconstruction exemption applies to eligible transactions resulting from legitimate reconstructions of corporate groups occurring or resulting from agreements or arrangements entered into before 1 July 2019.
While the exemption is not available for eligible transactions resulting from agreements or arrangements entered into on or after 1 July 2019, concessional relief may be available.
A corporate reconstruction arises where a corporate group reorganises its business structure, for example by transferring assets between corporations that are members of the corporate group.
The exemption applies to an eligible transaction arising as a consequence of a legitimate corporate reconstruction.
The exemption will be granted if the Commissioner is satisfied that the:
- Instrument or transfer is, or arises out of, an eligible transaction
- Eligible transaction does not arise from arrangements or a scheme devised for the principal purpose of taking advantage of the benefit of the corporate reconstruction exemption
- Conditions of the exemption, including those that may be binding on each member of the corporate group, will be met by the applicant.
The exemption can be revoked in the circumstances described in s250D of the Duties Act 2000 (the Act) which include where members of the relevant corporate group do not remain members of the corporate group for at least three years from the date on which the eligible transaction occurred.
Under s250A of the Act, an eligible transaction is any of the following that occurs under an arrangement or an agreement entered into before 1 July 2019:
- a transfer of dutiable property, as defined in s10(1), from one member of a corporate group to another member of the group
- a vesting of dutiable property by, or as a consequence of, a court order where the property was held by one member of a corporate group and vested in another member of the group
- an application to register a motor vehicle as a result of a transfer of the vehicle from one member to another member of the corporate group
- a dutiable transaction to which s14 applies between members of a corporate group
- a relevant acquisition by one member of a corporate group from another member to which s83 of the Act applies
- a declaration of trust relating to dutiable property, the specification of which forms part of the declaration of trust or part of the transaction constituted by the declaration of trust by one member of a corporate group under which dutiable property is held on trust for another member of the group
- any other transaction that results in the beneficial ownership of dutiable property, other than an excluded transaction, moving from one member of a corporate group to another.
Transactions completed before 1 July 2019
If the eligible transaction has occurred, but the corporate group has not yet applied for the exemption, the corporate group has three years from the date of the transaction to apply for an exemption.
Agreements or arrangements entered into before 1 July 2019
If the corporate group has committed to an agreement or arrangement for an eligible transaction before 1 July 2019, it can choose to apply for the corporate reconstruction exemption, even if the transaction completes after 1 July 2019.
Apply for an exemption
An exemption application can only be made for transactions that occurred before 1 July 2019.
An exemption application for those transactions can be made within three years of the eligible transaction occurring.
Transactions that occur after 1 July 2019 may be eligible for a concession after the transaction has settled.