What you need to know?
The NSW Government is making changes to stamp duty on insurance for small businesses and farmers in NSW.
From 1 January 2018, small businesses with an aggregated annual turnover of less than $2 million are not required to pay stamp duty on:
- Commercial vehicle insurance – for a motor vehicle used primarily for business purposes;
- Commercial aviation insurance – for an aircraft that is used primarily for business purposes;
- Occupational indemnity insurance – insurance covering liability arising out of the provision by a person of professional services or other services (other than medical indemnity cover within the meaning of the Medical Indemnity Act 2002 (Cth)); and
- Product and public liability insurance – insurance covering liability for personal injury or property damage occurring in connection with a business or arising out of the products or services of a business.
- Crop and livestock insurance will be exempt from stamp duty.
How will this impact you?
Small businesses will need to sign and return a declaration confirming their eligibility in writing prior to their placement for the insurer to apply the exemption. The declaration must be obtained for each income year in which the insurance is affected or renewed.
What do you need to do?
As a One Underwriting client, you will need to obtain a signed small business declaration from your clients prior to insurance placement. One Underwriting will retain a copy of the declaration on file. One Underwriting is unable to make the declaration on your [client’s] behalf and cannot be made over the phone as the legislation requires a written declaration from the insured. Please note that One Underwriting is not in a position to provide tax advice, such as whether your clients meet the small business definition. If your clients would like further advice on this matter please contact NSW Revenue.
A Bill is currently going through Parliament that may result in a different form of declaration being required. The current declaration is based on guidance provided by NSW Revenue.