Apportionment of business assets
How the dutiable value of a business asset determined
If the goodwill of a business, intellectual property or a statutory licence is used in other jurisdictions as well as NSW, the dutiable value = DV of a business asset is determined in accordance with the following formula:
DV = dutiable value.
A = the unencumbered value of the business asset, or so much of the consideration for the dutiable transaction as relates to the business asset, whichever is the greater.
X = the gross amount of the sales of goods and services (expressed in Australian dollars) made to NSW customers of the business during the last three completed financial years preceding the dutiable transaction.
Y = the gross amount of the sales of goods and services (expressed in Australian dollars) made to both NSW customers and non-NSW customers of the business during the last 3 completed financial years preceding the dutiable transaction.
Evidence of value
In general, evidence of value will be required if:
there is no consideration or nominal consideration; and
the Chief Commissioner is not satisfied that the consideration is an adequate indication of the unencumbered value of the property.
Evidence of value will usually be sought to verify the adequacy of the consideration in the following circumstances:
the parties are associated persons; or
in the case of an agreement for sale, there is no selling agent and the same legal firm is acting for both parties; or
the transaction relates to fractional interests in property; or
the consideration appears low for the type of property being sold.
Acceptable dates for a valuation report
Evidence of value is required as at the date of exchange or execution of the document, although evidence of value within three months of that date will be accepted in most cases. If the evidence of value is at a date more than three months from the date of the dutiable transaction, it may be accepted provided there has been no change affecting the value of the dutiable property during that time.
In the case of land, evidence of value more than three months and up to 12 months from the date of the transaction will be accepted if accompanied by a statutory declaration stating that no improvements have been effected, nor any zoning changes or lifting of restrictive conditions made by Council, between the date of the valuation and the date of the dutiable transaction.
The period of 12 months referred to above may be varied depending on the state of the property market and the location of the property. Generally, a period of 18 months will apply in the case of properties outside the metropolitan area.
Refer Revenue Ruling DUT012 for more details on Valuations of property
