Stamp Duty was abolished from all SA business transfers from 18 June 2015 but this is still (good) news for lots of people.
In fact, SA stamp duty was abolished for transfers of all non-quoted marketable securities (shares in private companies), units in unit trusts and all non-real property (non-land) transfers which includes licences such as water, taxi, fishing, gaming and business assets such as goodwill, stock, intellectual property and plant and equipment not fixed to land.
Stamp duty on the transfer of non-residential, non-primary production real property has been reduced by one third and will be reduced by another third on 1 July 2017 and then abolished completely on 1 July 2018. Revenue SA’s Information Circular No 76 sets out more information about the exemptions and the Commissioner’s definitions of key terms.
These measures have significantly reduced the cost of buying a business in SA or restructuring the ownership of a SA business. This is great news for prospective business owners who traditionally have a limited budget for start up costs which may include:
- The best business ownership structure;
- Advice on the Business Sale Contract including whether it contains appropriate warranties and restraints of trade;
- Business conveyancing to ensure the business is free of secured interests by banks, mortgagees and other PPSR encumbrances;
- Your business terms of trade;
- Ensuring business premises are secured and that the terms of any lease is appropriate;
- Liability for contractual commitments of the business including for employees
There are many other issues to consider when buying a new business or restructuring an existing ownership. Mark Lumley and myself have many years of experience in advising business owners.