The NSW Government has exempted small businesses from paying NSW stamp duty on certain types of insurance effected or renewed from 1 January 2018. If you wish to receive this exemption please complete the declaration and return to our office.
Please note if we do not receive the declaration at least 21 days prior to your renewal due date, the insurer may not have sufficient time to apply the stamp duty exemption to your policy.
What is the NSW small business exemption?
From 1 January 2018, NSW small businesses will be exempt from paying stamp duty on certain types of insurance.
What is a small business?
Revenue NSW has stated that: “You are a small business if you are an individual, partnership, company or trust that is carrying on a business, and the business has an aggregated turnover of less than $2 million. Aggregated turnover is your annual turnover plus the annual turnovers of any business entities that are your affiliates or are connected with you.”
What types of insurance are eligible for the exemption?
The types of insurance that may be eligible include:
- Commercial vehicle insurance, for a motor vehicle that is used primarily for business purposes.
- Occupational indemnity insurance (including professional indemnity) covering liability arising out of the provision by a person of professional services or other services (other than medical indemnity cover)
- Product and public liability insurance covering liability for personal injury or property damage occurring in connection with a business or arising out of the products or services of a business.
- Commercial aviation insurance for an aircraft that is used primarily for business purposes.Special definitions apply to each of these insurances so we recommend you refer to section 259B of the Act for full details. Insurers will only apply the exemption where they determine the policy is affected (in whole or part).When does the exemption apply?
The exemption only applies if the eligible insurance is in a contract effected (new business and variations) or renewed on or after the 1 January 2018.Instructions for applying for an exemption
To receive the exemption, please complete this declaration declaring that you are a small business. Email the completed declaration to The Builders Insurance Broker email@example.com
For a policy to be exempt, the insured must be a small business as at the date the policy is effected or renewed and the insurer must have a small business declaration. If an insurer does not have a small business declaration as at the date the policy is effected or renewed then the policy is liable to duty.
a. This declaration covers all policies issued to you during the financial year ended 30 June 2018.
b. If you are uncertain whether you classify as a small business, please speak to your financial adviser.
c. The Insurer will place reliance on your declaration in charging the applicable insurance duty.
d. False declarations may result in penalties up to of $11,000 by Revenue NSW plus the insurance duty not paid and penal interest on that balance.
e. Revenue NSW may also be able to clarify your queries relating to the law and your obligations.
f. If you are a not for profit organisation already entitled to a NSW Stamp Duty Exemption, your premium is already exempt and the NSW Stamp Duty Exemption for Small Business is not relevant.
Where to get further Information
Visit the Revenue NSW website http://www.revenue.nsw.gov.au/taxes/insurance/exemptions