Australia: Transfer of shares within corporate group not entitled to corporate reconstruction stamp duty relief (Queensland Court of Appeal decision)
Transferor and transferee were not “group companies” before the transferor “first owned” the shares.
The Queensland Court of Appeal on May 29, 2026, held in Commissioner of State Revenue v. Special Situations Investing Group III, Inc. that the corporate reconstruction exemption from stamp duty did not apply to an internal transfer of shares in a land-rich company between two entities within a corporate group because the transferor and transferee were not “group companies” before the transferor “first owned” the shares, and as such the shares were not “group property” for the purposes of section 406(2)(d) of the Duties Act.
The taxpayer argued that the determination of whether the transferor and transferee were group companies must be made when the transferor first acquired the shares. The tax authority contended that the determination must be made when the shares were first owned by any entity within the corporate group. The Court of Appeal agreed with the tax authority and held that the term “first owned” refers to the moment the asset first entered the wider corporate group.
KPMG observation
The decision reinforces that Queensland's corporate reconstruction regime is one of the most restrictive in Australia. Taxpayers must trace the ownership of the asset back to the date it was first acquired by any entity in the corporate group. The relationship between the specific transferor and transferee must have existed at that initial point in time.
For more information, contact a KPMG tax professional in Australia:
Cullen Smythe | cullensmythe@kpmg.com.au
Brooke Gosbell | bgosbell@kpmg.com.au