NOMINEE CLAUSES – NEW REVENUE RULING
The use of nominee clauses in contracts entered into after 1 October 2007 may attract additional stamp duty.
The Office of State Revenue has issued a new ruling which overturned the practice of using nominee clauses in contracts.
The ruling has been put in place to clarify the requirements necessary to satisfy the Commissioner of State Revenue that a purchaser was acting as an agent for a principal when entering into a contract to purchase property.
The purchasing party may not be changes from the offer and acceptance to the Transfer of Land. If the name differs, without stating that the contract was entered into by an agent of the purchaser, this may be viewed as an “on sale” and duty will need to be paid accordingly.
The agency must be clearly shown on the contract.
e.g. Peter Black as agent for John Green or Peter Black on behalf of John Green (John Green being the transferee on the Transfer of Land) in these cases the agency is clearly shown.
If the agency is not proven Ad valorem duty may apply or if the agency is proven but the purchaser not clearly identified a nominal duty of $20 may apply.