Ask Margaret: Convincing the Office of State Revenue

Hi Margaret,

I've recently purchased commercial real estate in the last 30 days in VIC (settlement has been completed).

I registered it under company "1 PTY LTD", however I wish to change this to a different company (I remain as the company director of the new company).

Stamp duty cost me 100k+ (I don't wish to pay this again).

Is the above possible without attracting stamp duty on the building if a mistake was made?

It may be hard for you to convince the office of state revenue that you made a mistake on this one - when you received the contract it would have asked for the purchaser's detail, the documents would have been signed by you as that purchaser and the State Revenue Office would have relied on these documents for the purpose of assessment of duty.

As this one is outside of my own area of expertise I consulted Paul Sande from Asset Conveyancing.  He is an expert in conveyancing in all states, as this area is markedly different from state to state.

He believes that there may be another avenue available to you.

Sec 250A of the Duties Act 2000 provides for an exemption from duty for an eligible transaction where there is a legitimate reconstruction of corporate groups. An eligible transaction is any of the following that occurs on or after 1 January 2004:-

1. A transfer of dutiable property from one member of a corporate group to another member of the group;
2. A relevant acquisition by a member of a corporate group from another member of the group to which Sec 83 of the Duties Act applies;
3. A declaration of trust 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 the dutiable property is held on trust for another member of the group; or
4. Any other transaction that results in the beneficial ownership of dutiable property moving from one member of a corporate group to another member of the group.

Paul says that the Commissioner needs to be satisfied, amongst other things, that the 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.

In your case you did this inadvertently and so there was no intent to gain any particular advantage here. Your best course of action is to consult your office of state revenue, explain that you wish to reconstruct the corporate group to have this property held by another member of that group, and see what they say about this.

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