Corporate consolidation exemption application
This online SmartForm can only be used where the eligible transaction was completed before 1 July 2019 or where the eligible transaction arises from an agreement or arrangement entered into before 1 July 2019.
For all other eligible transactions entered into on or after 1 July 2019, the corporate consolidation concession applies.
1. Corporate consolidation exemption: sections 250DA-250DG
The corporate consolidation exemption applies to eligible transactions occurring or arising from an agreement or arrangement entered into between 31 March 2005 and 30 June 2019, solely for the purposes of a corporate consolidation. An application for the exemption can be made at any time before the eligible transaction occurs or within three years of it occurring.
The Commissioner of State Revenue must grant the corporate consolidation exemption on an instrument or transfer of dutiable property if the Commissioner is satisfied that the:
- Instrument or transfer is, or arises out of, an eligible transaction.
- Eligible transaction does not arise from arrangements or a scheme devised for the principal purpose of taking advantage of the benefit of the corporate consolidation exemption.
- Conditions of the exemption, if any, will be met by the applicant.
The exemption may be granted subject to conditions that are binding on the head company and the corporation that was the parent corporation immediately before the corporate consolidation.
2. Corporate consolidation: section 250DB
A corporate consolidation is the formation of a consolidated group or consolidatable group by the interposition of a head company between a corporation that is a member of a corporate group and the shareholders or unitholders of that corporation.
3. Consolidated group, consolidatable group and head company: section 250DA
These terms have the same meaning as in sections 703-5, 703-10 and 703-15(2)(a) respectively of the Income Tax Assessment Act 1997.
4. Corporations, parent corporations and corporate groups: section 250DA
A corporation includes:
- A unit trust scheme, as defined in section 3(1).
- A public offer superannuation fund within the meaning of section 18 of the Superannuation Industry (Supervision) Act 1993 that has at least 300 public subscribers.
A parent corporation is a corporation that directly or indirectly:
- Holds at least 90 per cent of the beneficial ownership of another corporation (the subsidiary).
- Has the ability to cast, or to control the casting of, at least 90 per cent of the maximum number of votes that may be cast at a general meeting of the subsidiary.
A corporate group is a parent corporation and the subsidiaries of that parent corporation. If stapled securities are quoted on the ASX or a recognised stock exchange, the corporations in which the shares or units are issued, and the subsidiaries of each of those corporations, constitute a corporate group. However, nothing in sections 250DA-250DG applies to a corporation to the extent that it is a trustee of a discretionary trust. In addition, if Corporation A holds dutiable property on trust, other than as trustee of a unit trust scheme, for Corporation B, then Corporation A and Corporation B are taken not to be members of the same corporate group.
5. Eligible transactions: section 250DC
An eligible transaction is any of the following that occurs on or after 31 March 2005 solely for the purposes of a corporate consolidation:
- A transfer of dutiable property, as defined in section 10(1), from a shareholder or unitholder of a corporation to the head company.
- A vesting of dutiable property by, or as a consequence of, a court order where the property was held by a shareholder or unitholder of a corporation and is vested in the head company.
- An application to register a motor vehicle as a result of a transfer of the vehicle from a shareholder or unitholder of a corporation to the head company.
- A dutiable transaction to which section 14 applies between a shareholder or unitholder of a corporation and the head company.
- A relevant acquisition under Part 2 of Chapter 3 of the Act:
- by the head company from a shareholder or unitholder of a corporation, or
- by a shareholder or unitholder of a corporation from the head company.
- A declaration of trust relating to dutiable property, the specification of which forms part of the declaration of trust or part of the transaction constituted by the declaration of trust by the head company under which the dutiable property is held on trust for a shareholder or unitholder of a corporation.
- Any other transaction that results in the beneficial ownership of dutiable property, other than an excluded transaction, moving from a shareholder or unitholder of a corporation to the head company.
Under section 250DC(2), a transaction is not an eligible transaction unless:
- Except in the case of a relevant acquisition by a shareholder or unitholder of a corporation from the head company, the only consideration provided by the head company for the transaction consists of the issue of shares in the head company to the shareholders or unitholders of the corporation.
- Immediately after the issue of shares in the head company, all the shareholders in the head company are persons who were shareholders or unitholders in the corporation immediately before their shares or units were acquired by the head corporation.
6. Revocation of the corporate consolidation exemption: section 250DF
The Commissioner of State Revenue may revoke the corporate consolidation exemption in certain circumstances described in section 250DF.
Those circumstances include where the head company and the corporation that was the parent corporation immediately before the corporate consolidation do not remain members of the corporate group for at least three years from the date on which the eligible transaction occurred, but not where that cessation is by virtue of:
- A public float, as defined in section 250D(3), that occurred within 12 months after the day on which the transaction in respect of which the exemption was granted occurred.
- The shares or units of the head company or parent corporation being unstapled to enable its liquidation, deregistration, dissolution or, in the case of a unit trust scheme, winding up.
- Its liquidation, deregistration or, in the case of a unit trust scheme, winding up.
7. Special provision in relation to land-rich duty for private unit trust scheme consolidations: section 250DG
Section 250DG applies to a corporate consolidation that consists of the interposition of a head company between a private unit trust scheme and the unitholders of the private unit trust scheme. The section applies for a period of three years commencing at the time of the corporate consolidation.