What is the small business exemption?
The NSW Government has introduced a new small business stamp duty exemption in the Duties Act 1997 (NSW) (the Act) for eligible insurance acquired on or after 1 January 2018. In order to get the benefit of the exemption, the insured person must:
a) be an eligible small business; and,
b) provide a Declaration to the insurer in an approved form
What is small business?
The legislation is complex and Revenue NSW has issued guidance summarising when you are a small business as follows:
A small business is an entity within the meaning of section 152-10 (1AA) of the Income Tax Assessment Act 1997 of the Commonwealth for the income year in which the insurance is effected or renewed. At present, you are a small business entity if you are an individual, partnership, company or trust that:
a) is carrying on a business, and
b) has an aggregated turnover of less than $2 million.
Aggregated turnover is your annual turnover plus the annual turnovers of any business entities that are your affiliates or are connected with you.
Your business is connected with another business if:
a) either entity controls the other entity, or
b) both entities are controlled by the same third entity.
What types of insurance will the exemption apply to?
The types of insurance that may be eligible include:
• Commercial vehicle insurance,
• Occupational indemnity insurance
• Product and public liability insurance
• Commercial aviation insurance
How do I apply for the exemption?
An eligible insured person must provide a Declaration that they are a small business at the time the relevant insurance is effected or renewed