Duties Fact Sheet - Business Licences

A business licence means a licence, permit or authority that is issued, granted or given under:

1. a WA law and which is required by a WA law to be held by a person carrying out an activity for gain or reward or
2. a Commonwealth law and which is required by a Commonwealth law to be held by a person carrying out an activity in WA for gain or reward,

but does not include a fixed infrastructure access right, a fixed infrastructure control right or a fixed infrastructure statutory licence.

A business licence includes:

• an authorisation or entitlement under the Fish Resources Management Act 1994
• a pearling licence, hatchery licence or quota under the Pearling Act 1990
• a taxi plate under the Taxi Act 1994
• a licence under the Liquor Licensing Act 1988
• a commercial radio broadcasting licence or commercial television broadcasting licence under the Broadcasting Services Act 1992 (Cth) and
• a subscription-based broadcasting licence under Part 7 of the Broadcasting Services Act 1992 (Cth).

The transfer of a chattel, such as plant and equipment, is a dutiable transaction when the chattel is transferred with a business asset. A chattel does not include:

• chattels that are stock-in-trade, held for use in manufacture, under manufacture, or held or used in connection with the business of primary production
• livestock
• a vehicle the transfer or grant of a licence for which is chargeable with, or exempt from, vehicle licence duty
• a ship or vessel or
• anything fixed to land.

If an item is fixed to land (including land the subject of a mining tenement or pastoral lease), that item will not be considered a chattel for the purposes of the Duties Act.

However, the following things fixed to land will be treated as a chattel:

• a thing that is temporarily fixed to land for construction purposes
• a thing that is not a fixture at law and is used in a primary production business
• a relocatable home fixed to a residential park site, or an addition or structure fixed or attached to the home or site, that does not constitute a fixture at law or
• a thing acquired without the underlying land and there is an arrangement for the purchaser to permanently remove the thing within 90 days after it is transferred (or a longer period approved by the Commissioner).

Duty is calculated by determining the dutiable value of the dutiable transaction and applying the appropriate rate of transfer duty. The method of calculating the dutiable value will depend on the nature of the business and business asset. The rate of transfer duty will be the general rate, or a concessional rate if the business concession criteria set out in section 147 of the Duties Act are met.

The dutiable value of a WA business licence is the greater of:

1. the consideration for the dutiable transaction or
2. the unencumbered value of the business licence at the time when the liability for duty arises.

The dutiable value of a Commonwealth business licence held by a person carrying out an activity in WA (but where there is no business being conducted in or from WA) is the greater of:

1. the value of the business licence so far as it authorises the carrying out of an activity in WA or
2. the portion of the consideration for the transaction that relates to the carrying out of an activity in WA under the authority of the business licence.

The dutiable value of a Commonwealth business licence held by a business that is conducted in WA will be calculated under section 85 or 86 of the Duties Act, depending on the location of the business’s head office or principal place of business.

The dutiable value of chattels located in WA will be the greater of the consideration given for, or the unencumbered value of, the chattels.

Business licences held under the Fish Resources Management Act

Section 136 of the Duties Act provides for nominal duty to be charged on a dutiable transaction involving a business licence under the Fish Resources Management Act 1994 in circumstances where the Commissioner is satisfied that the transaction has not, and will not, result in the passing of a beneficial interest in the business licence.

Commissioner’s Practice ‘DA 11 - Dutiable Transactions Involving a Unit Entitlement under the Fish Resources Management Act 1994 - Claim of No Passing of a Beneficial Interest’ outlines the duty treatment of a transfer or lease of a unit entitlement under the Fish Resources Management Act 1994 where it is claimed that there is no change in beneficial ownership.

General rate of transfer duty

The general rate of transfer duty is as follows:

Concessional rate of transfer duty

A transaction may be assessed at the concessional rate of duty where:

• the dutiable property is business property
• the dutiable value of the dutiable property does not exceed $200,000 and
• the purchaser is an eligible purchaser, being a person who is not a government body and who intends to carry on the business for an indefinite period.

The concessional rate of transfer duty is as follows:

Apply using Form FDA3 ‘Concessional Rate of Duty: Certain Residential or Business Property Transactions’.

Self-assessment

Certain dutiable transactions involving WA business assets may be self assessed by an approved agent through Online Duties (Revenue Online).

Lodgment with the Commissioner

An instrument in hard copy form that effects or evidences a dutiable transaction, or a transfer duty statement in the approved form where there is no hard copy instrument, must be lodged within two months after the date that liability for duty on the dutiable transaction arises. Approved transfer duty statements are accessible on the website.

The Duties Information Requirements set out the standard information that should accompany each instrument or transfer duty statement in order to determine the correct transfer duty applicable to a transaction.

All transactions involving land (or any interest in land), must be lodged with Form FDA41 ‘Foreign Transfer Duty Declaration’.

The instrument or transfer duty statement should be lodged electronically (as an attachment) through the Online Services Portal.

If business assets are acquired via separate transactions that form substantially one arrangement, all instruments and transfer duty statements in the series of transactions should be lodged together on the same online lodgment or, if in person or post, using a single Form FDA0 ‘Duties Document Lodgment and Assessment’. Transactions lodged separately should include sufficient reference to the other lodgment so they can be cross-referenced to each other.

If the sale of a business involves separate transactions for the transfer of a business asset and the transfer of a chattel, section 14(2) of the Duties Act provides that the transaction over the chattel is a dutiable transaction if the separate transactions form substantially one arrangement. In these circumstances, the transactions will be aggregated and treated as a single dutiable transaction. For further information regarding aggregation, see Revenue Ruling DA 14 ‘Aggregation of Dutiable Transactions’.

Where two or more of the transactions are treated as a single transaction and one of the transactions relates to residential land, the residential concessional rate of duty will be chargeable on the single transaction if the residential concessional criteria is satisfied. For further information on the residential concessional rate, see Duties Fact Sheet ‘Transfer of Residential Land’.