Frequently Asked Questions Broker Distribution

Transcription

1 NSW Small Business Stamp Duty Exemption Frequently Asked Questions Broker Distribution FOR STAFF USE ONLY Version: Final Date: June NSW Stamp Duty Exemption FAQs for Broker Distribution

2 Document purpose Internal The purpose of this document is to answer frequently asked questions (FAQs), across all channels. This document is for internal use only and intended to be used as a master copy for individual business units to build relevant FAQS from. For instructions concerning the NSW small business stamp duty exemption, please see the NSW Stamp Duty Exemption - Quick Reference Guide. Table of Contents General Stamp Duty FAQs... 3 What is the NSW small business stamp duty exemption?... 3 What is a small business?... 3 Which insurance types will the exemption apply to?... 3 What is the NSW small business stamp duty declaration?... 3 From when does the exemption apply?... 3 How long does the declaration last for?... 4 How much is the exemption?... 4 What if the policy commenced before 1 January 2018, can the NSW stamp duty exemption be applied?... 4 What if the premium is being paid in instalments?... 4 Is CTP insurance eligible for the NSW Stamp Duty exemption?... 4 Can a NSW small business apply for an exemption for home insurance if working from home?... 4 Is there more information available on the NSW Small Business stamp duty legislation?... 4 Which products will the exemption apply to?... 4 About the Process... 5 When should a declaration be obtained?... 5 Does QBE need to see the declaration to apply the exemption?... 5 Where is QBE s NSW small business stamp duty exemption declaration located?... 5 Can non-qbe small business stamp duty exemption declarations be used?... 5 How will QBE know a NSW small business meets the necessary conditions to apply for the exemption?... 5 What happens if a small business claims an exemption when it is not entitled to it?... 5 What about apportionment? NSW Stamp Duty Exemption FAQs for Broker Distribution

3 What if the policy covers multiple risks?... 6 What if the customer has multiple Policies?... 6 How will Stamp Duty refunds be paid?... 6 Appendices... 6 General Stamp Duty FAQs What is the NSW small business stamp duty exemption? From 1 January 2018, some small businesses may be eligible to seek exemption from paying NSW stamp duty on certain types of insurance. What is a small business? Revenue NSW has stated that: You are a small business eligible to seek a stamp duty exemption if you are an individual, partnership, company or trust that is carrying on a business, and the business has an aggregated turnover of less than $2 million. Aggregated turnover is your Australia wide annual turnover plus the annual turnovers of any business entities that are your affiliates or are connected with you. Which insurance types will the exemption apply to? Insurance type Commercial vehicle insurance Commercial aviation insurance Occupational indemnity insurance Product and public liability insurance Cover affected Motor vehicles used primarily for business purposes. Aircraft used primarily for business purposes. Insurance covering liability arising out of the provision by a person of professional services or other services (other than medical indemnity cover). 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. What is the NSW small business stamp duty declaration? The NSW small business stamp duty exemption declaration is a legally binding statement made by the insured declaring that they are eligible for the NSW small business insurance stamp duty exemption. The declaration should be provided in the approved form confirming that the insured individual, partnership, company or trust is a small business as defined in the Act*. From when does the exemption apply? The exemption will only apply if: 3 NSW Stamp Duty Exemption FAQs for Broker Distribution

4 The relevant insurance (new business, additional risk variation and/ or renewal) is entered into/ renewed on or after 1 January 2018; and A NSW Small Business insurance stamp duty exemption declaration has been provided How long does the declaration last for? Revenue NSW has provided guidance to the industry which indicates that a declaration is only valid for a financial year. As such, a new declaration will be required each financial year, which can be provided upon annual renewal of your policy. How much is the exemption? Current stamp duty rates are 5% or 9 % depending on the policy coverage section. This will be automatically calculated depending on the risk for each policy coverage section. What if the policy commenced before 1 January 2018, can the NSW stamp duty exemption be applied? The NSW small business stamp duty exemption only applies to insurance policies effected or renewed for NSW risks on or after 1 January For policies renewed or effected prior to 1 January 2018, only additional risks added to these policies on or after 1 January 2018 will be eligible for the stamp duty exemption, if all other eligibility conditions are met. What if the premium is being paid in instalments? If a policy is effected or renewed before 1 January 2018 it will remain liable to duty. It does not matter if the premium is paid before or after 1 January 2018 or if the premium is paid in instalments. Is CTP insurance eligible for the NSW Stamp Duty exemption? No (please refer to policies in scope) Can a NSW small business apply for an exemption for home insurance if working from home? No. The NSW government has excluded home insurance as an eligible policy for NSW small business stamp duty exemption. Is there more information available on the NSW Small Business stamp duty legislation? Go to Revenue NSW website and see in particular: o Revenue NSW Small Business Exemption heading in Frequently Asked Questions o Insurance Duty- Also see the Duties Act 1997 (NSW) and the Income Tax Assessment Act 1997 (Cth). Which products will the exemption apply to? Please refer to for a list of impacted products 4 NSW Stamp Duty Exemption FAQs for Broker Distribution

5 About the Process When should a declaration be obtained? A declaration must be obtained before any stamp duty exemption is applied. For policies purchased through a broker, authorised representative or agent, the declaration must be received within 90 days of the renewal or policy commencement. For Direct and FI customers, the declaration must be received within 30 days of the renewal or policy commencement. Please Note: For policies incepted between 01/01/18-23/03/18 we will accept late declarations to adjusting the stamp duty portion of a premium. We will be writing to customers to advise them of their eligibility to apply for an exemption. The declaration is valid for each financial year, after which a new declaration will need to be completed. Does QBE need to see the declaration to apply the exemption? If it is a written declaration: Yes If it is a recorded verbal declaration: No Where is QBE s NSW small business stamp duty exemption declaration located? Can non-qbe small business stamp duty exemption declarations be used? QBE will only accept declarations from other organisations if their declaration meets the minimum standard approved by QBE and /or the ICA*. If you are uncertain whether your declaration meets this standard you should use the QBE template. *The declaration must state the following as a minimum standard and should include the insured s ABN, mobile and contact details and be signed and dated by the insured: I hereby declare that I am a Capital Gains Tax small business entity (within the meaning of section (1AA) of the Income Tax Assessment Act 1997 of the Commonwealth). I am a small business individual / partnership/ company and/ or trust, which is carrying on a business, and the business has an aggregated turnover of less than $2 million It should note that: Aggregated turnover is your Australia wide annual turnover plus the annual turnovers of any business entities that are your affiliates or are connected with you. How will QBE know a NSW small business meets the necessary conditions to apply for the exemption? QBE will rely entirely on the accuracy of the NSW small business stamp duty exemption declaration. If there is any uncertainty regarding eligibility for the NSW small business stamp duty exemption QBE recommend financial/ tax advice is sought from a financial advisor. What happens if a small business claims an exemption when it is not entitled to it? Revenue NSW may charge a penalty of up to $11,000 for submitting false exemption declarations. A small business may also be liable for an amount equal to the duty, together with any interest and/or 5 NSW Stamp Duty Exemption FAQs for Broker Distribution

6 penalty tax payable. If revenue NSW charge QBE, we will recover this amount as a debt if the amount is outstanding. Fraudulent exemption declarations may invalidate the insurance cover. What about apportionment? Some policies will be exempt on parts of the policy covered by the new NSW small business stamp duty exemption, but taxable at 5% and 9% on other parts of the policy. The apportionment rates may vary by insurer as they are based on each individual insurer s policy benefits and assessment of the split of risks. What if the policy covers multiple risks? Each risk in a multi-risk policy is assessed individually against the eligibility criteria for NSW small business stamp duty exemption. What if the customer has multiple Policies? In the event a customer has multiple policies, each policy will need to be noted as exempt. How will Stamp Duty refunds be paid? If the premium has been paid in full the Stamp Duty refund will be processed the way it was paid or as a cheque. If the premium is paid in instalments the refund will be calculated and future instalments adjusted to remove the stamp duty component of the total premium amount. Appendices SMALL BUSINESS STAMP DUTY EXEMPTION FOR NSW : PRODUCT LIST PRODUCT CODE APK APKO APKT PRODUCT DESCRIPTION AON BUSINESS PACKAGE AON OFFICE PACKAGE AON TRADES PACKAGE SECTIONS/COVERS EXEMPT ASL** ASSOCIATIONS LIABILITY DIRECTORS & OFFICERS LIABILITY [EXCEPT COMPANY REIMBURSEMENT] EMPLOYMENT PRACTICES LIABILITY BPK BUSINESS PACKAGE CAR CONSTRUCTION RISK INCL. TRADES, DISPLAY HOMES AND CONTRACTORS CMH COMMERCIAL HULL COMMERCIAL HULL LIABILITY CMP CONTRACTORS MACHINERY & CONTRACTORS MACHINERY & PLANT PLANT PUBLIC LIABILITY CON CONFERENCE PACKAGE PROFESSIONAL INDEMNITY CRR MARINE CARRIER CARRIER LIABILITY NO CODE CYBER??? CYBER, DATA SECURITY AND MULTIMEDIA COVER ONLY [ALL OTHER SECTIONS NOT EXEMPT] DOL** DIRECTORS & OFFICERS LIABILITY DIRECTORS & OFFICERS LIABILITY [EXCEPT COMPANY REIMBURSEMENT] FIDELITY* EXCESS DIRECTORS & OFFICERS LIABILITY [EXCEPT COMPANY REIMBURSEMENT] EMPLOYMENT PRACTICES LIABILITY ASSOCIATIONS PUBLIC AND PRODUCTS LIABILITY WORK HEALTH AND SAFETY???? ESI EMPLOYMENT SERVICES LIABILITY EMPLOYMENT PRACTICES LIABILITY EXL EXCESS LIABILITY EXCESS FAR FARM PACKAGE MOTOR VEHICLE COMMERCIAL/BUSINESS USE ONLY 6 NSW Stamp Duty Exemption FAQs for Broker Distribution

7 HHH HOUSEHOLDERS/HOUSEOWNERS PUBLIC LIABILITY ICT ICT PROFESSIONAL LIABILITY PROFESSIONAL INDEMNITY INCL. EXCESS ISP INDUSTRIAL SPECIAL PLANT MOTOR VEHICLE COMMERCIAL/BUSINESS USE ONLY LFL EMPLOYMENT SERVICES EMPLOYMENT PRACTICES LIABILITY LIABILITY PROFESSIONAL INDEMNITY DIRECTORS AND OFFICERS LIABILITY [EXCEPT COMPANY REIMBURSEMENT] MDI *** MEDICAL MALPRACTICE PROFESSIONAL INDEMNITY INCL EXCESS [PRACTIONER/PERSON AS DEFINED IS NOT EXEMPT] FIDELITY MLL MARINE LIABILITY ALL RELAVANT LIABILITY INCL. CHARTERER, MARINA, PORT AUTH., REPAIRER, STEVEDORE MNL** MANAGEMENT LIABILITY MANAGEMENT LIABILITY INCL. FIDELITY* [EXCEPT COMPANY REIMBURSEMENT] MPA PRIVATE MOTOR VEHICLE MOTOR VEHICLE COMMERCIAL USE ONLY MVA COMMERCIAL MOTOR & FLEET COMMERCIAL MOTOR & FLEET PEN PENALTY PROTECT EMPLOYMENT PRACTICES LIABILITY PER PERSONAL PACKAGE MOTOR VEHICLE COMMERCIAL/BUSINESS USE ONLY PID PROFESSIONAL INDEMNITY PROFESSIONAL INDEMNITY INCL. EXCESS FIDELITY CYBER - PLB GENERAL (BROADFORM) LIABILITY PRL PURPL (LIABILITY COMBINED) SECTION 1 CORPORATE COVER SECTION 2 [EXCEPT INSURING CLAUSE B COMPANY REIMBURSEMENT] FIDELITY* SAI SPORTS ACCIDENT AND INJURY PUBLIC LIABILITY PROFESSIONAL INDEMNITY SLI STATUTORY LIABILITY STATUTORY LIABILITY???? SLE SUPPLEMENTARY LEGAL EXPENSES LEGAL EXPENSES???? SUP COMMERCIAL STRATA INCL. OFFICER BEARERS LIABILITY TOP TRANSPORT OPERATORS MOTOR VEHICLE COMMERCIAL/BUSINESS USE ONLY CARRIERS LIABILITY PUBLIC LIABILITY UMB UMBRELLA LIABILITY UMBRELLA PUBLIC AND PRODUCTS LIABILITY UPK UNIT PACKAGE HOME LIABILITY AVIATION PRODUCT CODE AAG ACB APL CHT COM MST SCH SDM UAV AVIATION PRODUCT DESCRIPTION Aerial Ag Aero Clubs Airfield Premises Charter Ops Commuter Ops Mustering Flying School Sales and Demo Unmanned Aerial???? YET TO CONFIRM IF/HOW EXEMPTION APPLIES * FIDELITY IS ONLY EXEMPT WHERE A PART OF A PACKAGE ** COMPANY REIMBURSEMENT COVER IS NOT EXEMPT *** MEDICAL MALPRACTICE QBE will treat MDI as NOT EXEMPT. However there are few cases where the Insured will genuinely fall into the exemption. If a broker refers a risk into QBE and advises their insured meets the criteria for a small business exemption then we need to ask the broker the following additional question; 7 NSW Stamp Duty Exemption FAQs for Broker Distribution

8 1. Does or did the insured employ anyone who practices a health profession? Under section 5 of the Health Practitioner Regulation National Law (NSW), health profession means the following professions, and includes a recognised specialty in any of the following professions health profession means: Aboriginal and Torres Strait Islander Health Practitioner Chinese Medicine Practitioner Chiropractor Dental Practitioner Medical Practitioner Medical Radiation Practitioner Specialty: Acupuncturist Chinese herbal medicine practitioner Chinese herbal dispenser Dentist Dental therapist Dental hygienist Dental prosthetist Oral health therapist Diagnostic radiographer Nuclear medicine technologists Radiation therapist Nurse Registered nurse (Division 1) Enrolled nurse (Division 2) Midwife Occupational therapist Optometrist Osteopath Pharmacist Physiotherapist Podiatrist Psychologist 2. If they answer YES the exemption does NOT apply. 3. If they answer NO, then they are eligible for the exemption. Example of risks that may be exempt are; Massage therapy (that does not employ an acupuncturist, physio etc), Speech pathologist practice (that does not employ a nurse, or occupational therapist) or Nutritionists, Naturopaths, Reflexologists, Reiki, essential oil therapy etc etc (as long as they are not qualified as any of the above occupations) 8 NSW Stamp Duty Exemption FAQs for Broker Distribution