Section: Andrew Barr, MLA | Media Releases
In the Legislative Assembly today I introduced amendments to eliminate charges when a business is transferred to a new owner.
The ACT Labor Government is committed to making doing business in the Territory simpler and more efficient. Today’s amendment is just one aspect of the Government’s commitment to taxation reform and support for local businesses. The Government will announce its business and industry development strategy next month.
The Duties Amendment Bill 2012 (No 2) amends the Duties Act 1999 to remove an anomaly whereby the transfer of a short-term sub-lease to a new owner is subject to nominal duty of $20, while the transfer of goods – such as coffee machines, fridges, or ovens, in conjunction with a sublease – is subject to duty.
It is common practice when a business is sold for an existing sublease to be transferred to the new owner. This allows the new owner to continue operating the business from the same premises, and under the existing terms and conditions of the lease. The value of a short-term sublease is nominal, and therefore is only subject to the minimum duty of $20.
However, business goods transferred with other dutiable property, such as a sublease, attract duty on the total value of the goods transferred. The Commissioner for ACT Revenue has generally exercised discretion under the Act to exclude such goods when determining a taxpayer’s duty liability.
By abolishing duty on short-term subleases, this Bill removes a small nuisance tax on the ACT business community.
This will assist businesses in the ACT by reducing compliance burdens and streamlining asset transfer processes.
As a consequence, it also removes the anomalous duty on goods transferred with these short-term subleases.
This change only affects goods transferred with short-term subleases. Transfers of long-term subleases with a term greater than 30 years, and associated goods, will remain liable to duty.
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