Corporate reconstruction and consolidation transaction exemption

​​​​​​​​​​​General exemptions from duty are contained in Chapter 10 of the Duties Act 2001 (the Act).  Part 1A of that Chapter, introduced with effect from 6 December 2016, provides specific exemptions for corporate reconstruction and corporate consolidation transactions resulting from corporate reorganisations that would otherwise attract landholder or transfer duty. 
 
​For the purposes of the corporate reconstruction and consolidation transaction exemptions:

  • a corporate group means a parent corporation and its subsidiaries.
  • a corporation includes a unit trust scheme
  • securities refers to shares in the case of companies or units in the case of unit trusts.

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How to apply​

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A corporate reconstruction transaction is where a corporate group transfers securities or property amongst its members to reorganise its business structure in order to, for example:

  • align its business operations to a relevant legal entity; 
  • improve the balance sheet of a subsidiary seeking finance; 
  • respond to structural changes by a parent; 
  • remove expensive, outdated structures in complex groups; and 
  • merge business operations and legal entities following a takeover.

How to apply

An application for a corporate consolidation or corporate reconstruction exemption must be made to the Commissioner after the transaction occurs.  

The Commissioner is not able to advise on whether or not a transaction would qualify for an exemption prior to the transaction(s) having been undertaken. 

Accordingly, taxpayers should seek independent advice if unsure whether a contemplated transaction would qualify for an exemption. Section 226F of the Act permits the Commissioner to approve an exemption subject to conditions.​​

Supporting documentation

  • ​diagram/s of structure of corporate group (clearly evidencing ownership interests) before and after the corporate reconstruction; 
  • ​ASIC records, or extracts from the registers of shareholders or unit holders, or company extracts as at all relevant times; and 
  • the trust deed, including any amendments where relevant. 

A corporate consolidation transaction relates to the acquisition of an interest in a landholder by virtue of interposing a company or unit trust (the head corporation) between another company or unit trust (the affected corporation) and the holders of the affected corporation’s securities.​


How to apply

An application for a corporate consolidation or corporate reconstruction exemption must be made to the Commissioner after the transaction occurs.  

The Commissioner is not able to advise on whether or not a transaction would qualify for an exemption prior to the transaction(s) having been undertaken. 

Accordingly, taxpayers should seek independent advice if unsure whether a contemplated transaction would qualify for an exemption. Section 226F of the Act permits the Commissioner to approve an exemption subject to conditions.​

Supporting documentation

  • ​diagram/s of the structure of the corporate group (clearly evidencing ownership interests) before and after the corporate consolidation; 
  • ASIC records, or extracts from the registers of shareholders or unit holders, before and after the consolidation transaction; and 
  • the unit trust scheme deed, including any amendments, where relevant.​​



Pre and post-association tests

In the Act, a transaction does not constitute a corporate reconstruction or corporate consolidation transaction unless the parties to the transaction(s) (excluding the security holders (as indicated in the example above) in the case of a corporate consolidation) satisfy both a pre-association test and the Commissioner is satisfied that the members involved will also meet the post-association test.  

An exemption may be revoked if the post-association requirement is not adhered to, or if the exemption was granted based on false or misleading information provided to the Commissioner.


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