Corporate consolidation concession

Key information

The corporate consolidation concession reduces the duty payable on some corporate restructures. It applies where an existing corporate group changes its structure by placing a head company above the existing group solely for the purposes of forming or continuing a consolidated group for income tax purposes. 

Under this concession:

• duty on eligible transactions is charged at 10% of the duty otherwise payable
• landholder acquisitions and related transactions that form part of the same consolidation may be eligible
• transactions that combine 2 or more separate corporate groups into one group are not eligible.

Eligible consolidations and transactions

A corporate consolidation means the interposition of a head company between a corporation that is a member of a corporate group and its shareholders or unitholders. This must be done for the purposes of forming or continuing a consolidated group.  

The concession does not apply where:

• a corporate group did not exist immediately before the consolidation, or 
• the consolidation has the effect of merging 2 or more corporate groups.

Where a consolidation involves the interposition of a new head company above a landholding member of a corporate group, the consolidation results in a relevant acquisition. This type of acquisition may be eligible for relief under the concession. The concession may also provide relief to other eligible transactions effected as part of the consolidation.

Where the consolidation places a new head company above a private unit trust scheme, special provisions in section 250DG of the Duties Act 2000 apply. In these cases, the new head company is treated as a private unit trust scheme for a period of 3 years after the consolidation.

For more information on corporate consolidations, refer to sections 250-250DG of the Act.

Subsequent eligible transactions

Corporate consolidations may involve multiple transactions. These transactions may be undertaken as part of the same arrangement to effect the consolidation and/or subsequent reconstruction of the corporate group.

Where the subsequent transactions involve the transfer and/or acquisition of the same interest in property, duty may be reduced. This also applies where the same underlying interest in the land holdings of a landholder is transferred or acquired. The reduction is equal to the duty chargeable on any earlier eligible transactions.

For this reduction to apply, both the earlier eligible transaction and the subsequent eligible transaction must be part of the same arrangement. They must also occur within 30 days of the date of the first eligible transaction under the arrangement. Depending on the nature of the subsequent eligible transaction, this can result in no duty being charged on the transaction.

Lodging a landholder acquisition statement

Where a corporate consolidation involves the acquisition of a landholder, you must complete and lodge a section 83 landholder acquisition statement online. 

You must pay duty within 30 days of the date of the acquisition of the landholder. Penalty tax and interest may apply if you do not meet this deadline.

Your acquisition statement must include these documents:

• Constitutions and Australian Securities and Investments Commission (ASIC) extracts, or the foreign equivalent if the corporation is registered overseas, for all relevant companies in the corporate group.
• Trust deeds, with all amending deeds, and unit registers for all relevant unit trust schemes in the corporate group.
• A diagram of the structure of the corporate group before and after the relevant acquisition showing the ownership structure and percentage holdings.
• Evidence of the ownership of interests in the former and new head entities immediately before and after the interposition of the new head company.
• A statutory declaration by the directors of the new head company attesting that the acquisition of the landholder was effected solely for the purposes of a corporate consolidation.