Buying a business in Queensland comes with several costs, and one of those costs is duty.
It’s an issue that’s often overlooked, and if you’re a buyer from interstate, duty costs on business sales can come as a bit of a shock. New South Wales currently has nominal duty costs, and Victoria has none.
In Queensland, stamp duty on business purchases is calculated based on the total value of the transaction. This generally includes the purchase price of the business and any stock or assets included..
A business purchased by acquiring its assets (instead of shares in a company) is classified as “dutiable property”, and you will have to pay transfer duty on the purchase.
Business assets usually covers tangible and intangible items, including:
- Business name and trademarks
- Business licences or permits
- Debts of the business
- Franchise or distribution rights
- Goodwill
- Goodwill-related agreements
- Intellectual property;
- Business premises lease.
There are some exemptions and concessions that may reduce or waive the stamp duty payable on business purchases in Queensland. For example:
- Inter-group transfers: If the business is transferred within a group of related entities, there may be exemptions or reductions in stamp duty.
Transfer duty rates in Queensland are based on a sliding scale. It is important that you are aware of the rates so that you can estimate the cost of your transfer duty before going ahead with the purchase.
The sale contract will normally state that the buyer must pay the entire transfer duty. It is standard that the buyer pays the costs included for acquiring the business, including stamp duty, so make sure you have funds set aside.
Stamp duty is usually paid within 30 days of the settlement of the contract.
Ensuring you have the right legal advice is vital when you are either buying or selling a business. The corporate law experts at GLG Legal Brisbane can help you every step of the way and ensure you meet all your legal obligations.
Make an appointment now by calling our office on: (07) 3161 9555 or by emailing: info@glglegal.com.au