A number of Australian jurisdictions still impose duty on transfers of debts and, to keep things interesting, the rules governing the location of debts are a combination of long established common law and current statute.
- distributing a debt to a shareholder/ beneficiary
- transferring a debt within a group as part of a group restructure
- pre-liquidation transfers
- declaring that a debt will be held on trust for another party
- sale of under performing debts.
Some states have exemptions for transfers within a group and securitisation transactions, but detailed conditions for these exemptions are interpreted strictly and may not be available for all transactions.
- consider the transaction and documentation – are these the most appropriate way to deal with this asset?
- where is the debt located? What compliance obligations flow from this?
- if a liability arises, is any relief available?
- seek expert advice.
As you can see, the stamp duty rules that apply to transfers of debts can be very complicated and carry a nasty sting if you get it wrong. For more information please contact me or a member of your Indirect Tax team.