This page outlines the duty consequences that arise in accordance with the provisions of the Stamp Duties Act 1923 from the conveyance or transfer of partnership land or an interest in partnership land.
Please see Real Property (Land) for land conveyances or transfers between separate parties.
No liability to duty arises in relation to a conveyance or transfer of an interest in non-residential and non-primary production land (“qualifying land”) executed on or after 1 July 2018 (subject to the conveyance or transfer of an interest not arising from a contract of sale or other transaction entered into before 1 July 2018). Accordingly, only conveyances or transfers of an interest (including an assignment) in residential and primary production land remain liable to duty. Further information regarding the phased reduction of the rates applicable to qualifying land from 7 December 2015 to 30 June 2018 is available in Information Circular 103.
Section and Part references in the following relate to the Stamp Duties Act 1923.
As of 18 June 2015, duty has been abolished on the conveyance, transfer or acquisition of personal property, but it is still payable on real property. This includes property of a partnership.
In light of the subsequent abolition of duty on acquisitions of qualifying land (discussed above), only conveyances or transfers of an interest in residential and primary production land remain liable to duty.
Land is defined in sections 2(4) to 2(11), and includes:
- interests in land (including the interest of a tenant under a lease of land); and
- fixtures, and items fixed to land (even if not fixtures at law).
Property means “real or personal property and includes – (b) an interest in property”.
Interest in property means “a legal or equitable interest and includes a potential, contingent, expectant or inchoate interest”.
Land may be a partnership asset by a variety of means, including:
- land owned by one partner as agent for the partnership;
- land owned by some of the partners as agents for the partnership;
- land owned by all of the partners as agents for the partnership; or
- an entity as agent/nominee on behalf of the partnership.
A change to a partnership generally occurs as a result of:
- the admission of a partner;
- the retirement of a partner;
- a change in the entitlements of a partner; or
- the rollover of a partnership into a company.
Where land or an interest in land owned by a partner is conveyed or transferred, duty is payable on (as applicable):
- a partnership dissolution document;
- a partnership agreement (however described);
- a Transfer; or
- if no such document exists, a Section 71E Statement (PDF 49KB).
The partnership dissolution document, partnership agreement, Transfer or Section 71E Statement (PDF 49KB) (as the case may be) must be submitted to RevenueSA via RevenueSA Online. Land holder duty may in certain circumstances be payable on a Section 102B Return - Acquisition of Interest in a Land Holding Entity (PDF 272KB).
Where an instrument does not apportion a consideration for the value of the land interest, duty is calculated on either the consideration or the market value of the land or interest being conveyed or transferred as at the date of conveyance or transfer, whichever is the greater, assuming that the property is at that date free from encumbrances (Section 60A).
Land owned by the partnership
Refer to the following examples where a partner leaves a partnership and the partnership owns land in one of the ownership arrangements discussed above.
Land owned by one partner
The partnership comprises 3 equal partners, A, B and C. The partnership land is owned by A. A is leaving the partnership.
If the land is to remain as partnership property, A will execute a Transfer to transfer their interest in the land to B and C. As B and C have held a 2/3 equitable interest in the land, in accordance with Section 60A(4b), duty is liable on the transfer of the 1/3 interest held by A to B and C.
Alternatively, A may retain the land, such that it is no longer partnership property. In this case, in accordance with Section 60A(4b), duty is liable on the transfer of the 2/3 equitable interest in the land from B and C to A and a Section 71E Statement (PDF 49KB) is required to be completed and submitted for assessment.
Land owned by some of the partners
The partnership comprises 3 equal partners, A, B and C. The partnership land is owned by B and C equally. A is leaving the partnership.
In this case, duty is liable on the transfer of the 1/3 equitable interest in the land from A to B and C and a Section 71E Statement (PDF 49KB) is required to be completed and submitted for assessment.
Land owned by all the partners
The partnership comprises 3 equal partners, A, B and C. The partnership land is owned by all the partners equally. A is leaving the partnership.
A executes a Transfer to transfer their interest in the land to B and C as the land remains partnership property. Duty is liable on the transfer of A’s 1/3 interest in the land from A to B and C.
If the partnership owns land used for primary production, the exemption at Section 71CC may apply, as explained in the next example.
Refer to the following example in the context of a primary production partnership.
Primary Production land owned by family members in partnership
The partnership comprises 2 brothers and their wives, who own 2 properties in equal shares. Both properties are used for primary production and are assets of the partnership.
The parties have decided to dissolve the partnership and each couple will take one property.
The transfer of the non-realty assets of the partnership are not liable to duty. Whilst duty would ordinarily be liable on each transfer, the transaction satisfies the criteria for an exemption from duty pursuant to Section 71CC.
Refer to the following example where a partner joins a partnership that owns land.
Admission of a partner
The partnership comprises 2 equal partners, A and B. C is joining the partnership. The partnership land is owned by the existing partners A and B equally.
A, B and C execute a Transfer to give C an equal interest with A and B in the land. Duty is liable on the Transfer of a 1/3 interest from A and B to C in the land.
If instead on C joining the partnership the land remains in the names of A and B, such that no Transfer is executed, a Section 71E Statement (PDF 49KB) is required to be completed and submitted for assessment. Duty is liable on the conveyance of the equitable 1/3 interest to C from A and B.
Land owned by an entity for the partnership
Generally, where land is owned for the partnership by an entity that is not a partner, it is either owned by:
- a bare trustee/nominee company, and is recognised and accounted for as a partnership asset; or
- a service entity, usually in the form of a unit trust, and is leased to the partnership and is not recognised and accounted for as a partnership asset, but it is instead recognised and accounted for as an asset of the unit trust.
The following examples set out how duty is calculated where a partner leaves a partnership and the land is owned by an entity that is not a partner.
Land owned by a nominee company on behalf of the partnership
The partnership comprises 3 equal partners, A, B and C. Land is owned for the partnership by a nominee company, XYZ Pty Ltd, which is not a partner. There are 6 issued shares in the company, 2 shares owned by each partner.
A is leaving the partnership and transfers their 2 shares in XYZ Pty Ltd, 1 to each of B and C.
Whilst no duty is payable on share transfers (duty on share transfers was abolished from 18 June 2015), as the land is a partnership asset (XYZ Pty Ltd acts as a bare trustee for the partnership and does not own the land beneficially for itself), duty is liable on the transfer of A’s 1/3 equitable interest in the land and a Section 71E Statement (PDF 49KB) is required to be completed and submitted for assessment.
Land owned by a trustee of a Unit Trust on behalf of the partnership
Unlike the above examples, rather than the duty liability arising by way of a conveyance or transfer of a legal or equitable interest in partnership land, the duty liability in the following example arises instead by virtue of persons (albeit also partners in a partnership) acquiring a prescribed interest in a land holding entity pursuant to Part 4.
The 2018 Guide to Legislation: Stamp Duty Land Holder provides further information regarding the land holder provisions under Part 4.
The partnership comprises 3 equal partners, A, B and C. Land is owned by a trustee company, ABC Pty Ltd, as trustee for the ABC Unit Trust. There are 6 issued units in the ABC Trust, 2 units owned by each partner.
A is leaving the partnership and transfers their interest in the partnership to B and C and transfers their 2 units in the ABC Trust, 1 to each of B and C. Whilst no duty is payable on the transfer of the interest in the partnership or the unit transfers, as B and C each acquire a prescribed interest of 50% in a landholding entity, ABC Trust, both B and C are liable to duty pursuant to Part 4.
A change of an interest in a partnership that owns land (except where a family farm exemption pursuant to Section 71CC applies – see the Stamp Duty Document Guide for further information) must be submitted to RevenueSA via RevenueSA Online, together with:
- a valuation of the partnership and/or land as at the date of the conveyance (if available). Information Circular 102 provides further information regarding valuations;
- the balance sheet of the partnership showing the assets immediately before and after the change of interest in the partnership, or if applicable the before and after balance sheets for the nominee company or unit trust;
- a copy of the partnership agreement together with any amending or variation documents;
- all partnership dissolution documents however constituted;
- a Section 71E Statement (PDF 49KB) (if applicable); and
- a Section 102B Return - Acquisition of Interest in a Land Holding Entity (PDF 272KB) (if applicable).
When contacting us please provide your property information (such as address, ownership number, site details, etc) and conveyancer information, where applicable.
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