The importance of considering stamp duty
in any debtor financing transaction
In the previous instalment, we looked at the importance of considering any competing security
interests in the receivables. In this final instalment, we examine the importance of considering
the impact of stamp duty on any receivables financing transaction.
Stamp duty: the end of Clayton’s contracts?
Until recently, the only Australian state or territory in
which stamp duty was likely to arise in connection with
the transfer of unsecured receivables under a receivables
financing arrangement was South Australia1. In that
jurisdiction, a written agreement, or written evidence of
an agreement, to convey certain South Australian trade
receivables could attract duty.
Often, therefore, receivables financing arrangements are
carefully structured so that the financier’s acceptance of the
seller’s offer is evidenced by the financier’s conduct (typically,
by the payment of the purchase price into a designated
account), rather than by written acceptance (thereby giving
effect to a written “instrument” for South Australian stamp
duty purposes). Although not bullet-proof, these structures
– known as Clayton’s contracts – have been implemented
over time as a safeguard against the arrangement attracting
stamp duty in South Australia.2
However, legislation has recently been passed by the South
Australian state government which marks a change in
the landscape for receivables financiers. As a result, the
previously broad stamp duty base has been significantly
narrowed, one impact of which is that the transfer of
receivables will no longer be dutiable in South Australia
effective on and from 18 June 2015.3
This means that, for new receivables financing transactions
entered after 18 June 2015, the Clayton’s contract model
should no longer be necessary for the transfer of trade
receivables in South Australia. The impact on arrangements
entered into prior to 18 June 2015 remains unclear and, as
such, financers should consult with their tax advisers before
departing from existing structures. We can assist with this.
Trent would like to thank Barbara Phair, Partner in the Tax team at Ashurst, for her contribution to this guide.
Notes
1. In Queensland, an exemption applies if the arrangement comprises a debt factoring
agreement (see s 149 Duties Act 2001 (QLD)). In the remaining Australian states and
territories, unsecured trade receivables are not dutiable property.
2. RevenueSA has in the past accepted that these arrangements do not attract general
anti-avoidance provisions.
3. The changes are included in the Statutes Amendment and Repeal (Budget 2015) Act
2015 which was passed on 26 November 2015.
