The NSW Government has created a new small business stamp duty exemption for eligible insurance policies acquired or renewed on or after 1 January 2018. In order to get the benefit of the exemption, you must:
- be an eligible small business; and,
- provide a Declaration to your insurer in an approved form.
These changes apply to these insurances:
- Commercial vehicle insurance for a motor vehicle used primarily for business purposes
- Occupational indemnity insurance including professional indemnity for the provision of professional services
- Product and public liability insurance covering liability for personal injury or property damage in connection with a business or arising out of the products or services of a business
- Commercial aviation insurance
The definition of small business used in the amended Duties Act 1997 (NSW) is the one used in the Tax Assessment Act 1997. As general guidance a small business entity is an individual, partnership company or trust carrying on business and turning over less than an aggregated $2 million a year. Aggregated turnover is your annual turnover plus the annual turnovers of any business entities that are your affiliates or are connected with you.
If you are not sure if you are eligible as a small business you can visit Revenue NSW website for more information or talk to your professional advisors such as your tax advisor.
If you believe you are eligible as a small business you will need to make a small business declaration each time you take out an eligible policy or when your eligible policy is renewed.
If you do not complete the declaration for the insurer you are not entitled to claim the exemption. There are penalties for claiming the exemption if you are not eligible for it.