NSW small business insurance duty exemptions highlighted
Small businesses in NSW have been given a leg-up with stamp duty exemption on certain types of insurance but issues over eligibility persist.
The NSW government recently mandated that certain types of insurance for small businesses are not liable to pay duty from 1 January 2018.
Revenue NSW classifies small business as an entity with 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.
HLB partner Mariana von-Lucken believes there might be issues in determining if a business falls within the definition, but broadly speaking, is considered a small business if you are an individual, company, partnership or trust that is carrying on a business, and has an aggregated turnover of less than $2 million.
According to Revenue NSW, the exemption will apply to commercial vehicle insurance, commercial aviation insurance, occupational indemnity insurance, and product and public liability insurance.
“[Small businesses] must complete and provide your insurer with a small business declaration, the declaration is to be provided by the insurer, before the insurance policy is incepted or renewed,” said Ms von-Lucken.
“If the declaration is sent to your insurer after the policy is incepted or renewed, you will be liable for stamp duty.
“The declaration is valid for the whole of the income year for which you are a small business and must be provided to your insurer each income year.”
For more information on the exemption, please refer to the NSW Revenue guidance.