The NSW Government has recently introduced a stamp duty exemption on certain types of insurances for small businesses. The exemption applies to eligible insurance policies incepted or renewed from 1 January 2018. Find out below if you’re small business is eligible for the stamp duty exemption.

What is a small business?

You are a small business if you are an individual, company, partnership or trust:

  • carrying on a business; and
  • have an aggregated turnover of less than $2 million.

Aggregated turnover is your annual turnover plus the annual turnover of any business you are affiliated or connected to. Given the complexity of the tax legislation, please contact us if you require assistance to determine whether your business falls within the definition of a small business.

What types of insurance are exempt?

The following types of insurance may be exempt from stamp duty:

  • Commercial vehicle insurance – for vehicles primarily used for business purposes;
  • Commercial aviation insurance – for aircraft primarily used for business purposes;
  • Occupational indemnity insurance – covering liability from the provision of a person of professional services (not including medical indemnity cover); or
  • Product and public indemnity insurance – covering liability for personal injury or property damage that may occur in connection with a business from its products or services.
When does the exemption apply from?

The exemption applies to policies incepted or renewed from 1 January 2018.

How do I get the exemption?

You must complete and provide your insurer with a small business declaration (the declaration is to be provided by the insurer) before the insurance policy is incepted or renewed. If the declaration is sent to your insurer after the policy is incepted or renewed, you will be liable for stamp duty.

The declaration is valid for the whole of the income year for which you are a small business and must be provided to your insurer each income year. If you have multiple policies with different insurers, a separate declaration needs to be provided to each insurer to claim the exemption.