Each of New South Wales, Victoria, Queensland, Western Australia and the Northern Territory referred in their most recent budget statements to increasing their compliance activities. Western Australia recently introduced a Bill to enable interim assessments of stamp duty and to implement rules around commissioning valuations, each designed to improve cash flow for the State.
We are also seeing changes to administrative practices for stamping in most States, including:
- increased requests for more detailed information
- more frequent imposition of interest and penalties
- greater scrutiny in considering exemptions, with technical arguments used to deny exemptions.
From a taxpayer perspective these changes result in significantly increased compliance costs and use of management time, making it more important to be well prepared for any engagement with the State revenue authorities.
One practical issue is considering the need for, and timing of, valuations relevant to any assessment. Another is to being conservative in providing for any stamp duty liability, particularly where there is uncertainty about the revenue office position or the liability depends on a purchase price allocation or valuation that cannot be completed at the time you sign the deal.
Finally, make sure you keep us engaged in the transaction so that we are aware of all relevant details of the deal.
Prevention is better (and usually cheaper) than cure.