Refund of Insurance Stamp Duty October 2009
The Qantas Decision
Clients have previously been notified of the outcome of the Qantas case (the NSW Supreme Court decision in Qantas Airways Ltd v Chief Commissioner of State Revenue).
The upshot of this decision is that NSW insureds who, prior to 20 June 2006, took out an insurance policy with an insurer that was not registered or authorised as a general insurer under the Insurance Act 1973 (Cth) for the purposes of the relevant NSW stamp duties legislation, may be entitled to a refund (in whole or in part) of stamp duty paid on the policy.
JLT’s Application for Reassessment in NSW
A bulk application for reassessment was made by JLT on behalf of affected clients to the NSW Office of State Revenue (OSR) in December 2008.
The refund payable is limited to duty paid in the five year period prior to the date on which the application for a reassessment was made.
Procedures for Seeking a Refund in NSW
JLT, in conjunction with the National Insurance Brokers Association (NIBA), has engaged with the NSW OSR to help develop a simple procedure for making refunds to affected policy holders.
These procedures assume that it is the responsibility of the relevant policy holder to make a claim for a refund.
Eligible policy holders can use the NSW OSRs application form Request for Refund of Duty on Insurance taken out with Non-Registered/Unauthorised Insurers. This is available for download from the New South Wales Office of State Revenue.
The form can be lodged with the Chief Commissioner of State Revenue, Office of State Revenue, GPO Box 4042, Sydney NSW 2001 and marked to the attention of John Renshaw, Manager Returns. Any enquiries can be made by calling 1300 139 817 or via email at returns@osr.nsw.gov.au. It may take several weeks before clients receive any refund that they may be entitled to after they lodge their application.
To obtain a refund, our clients will need to provide the OSR with evidence of the duty paid. If you are an affected policyholder and you wish to obtain a refund, please let us know so that we can provide you with appropriate information (wherever possible) to enable you to do so.
The Position in Other States and Territories
The outcome of the Qantas case may have implications in other States and Territories, namely the ACT, Tasmania and QLD, where the relevant provisions of the stamp duties legislation in those States/Territories are considered to be substantially similar to those in NSW.
The OSRs in those States/Territories have been written to via NIBA and asked to advise whether they are willing to accept reservation of rights to a refund as has been agreed with the NSW OSR.
To date their responses have been as follows:
The ACT OSR has acknowledged that for the period 1 March 1999 - 17 May 2006 (inclusive) its stamp duties legislation had substantially similar provisions to the NSW legislation. It has therefore recently agreed that it will introduce similar procedures to the NSW OSR for refunding stamp duties. The ACT OSR has agreed to refunds for all relevant policyholders who have paid stamp duty on general insurance effected in relation to ACT insurance business during the period 1 March 1999 to 17 May 2006. with an insurer that was not registered or authorised under the Insurance Act 1973 for the purposes of the relevant ACT stamp duties legislation. Unlike NSW, the ACT OSR does not appear to be imposing a 5 year restriction on applications for refunds.
Similar to the NSW position, the ACT procedures for claiming a refund assume that it is the responsibility of the relevant policyholder to make the refund claim.
Eligible policyholders can use the ACT Revenue Officer’s application form ACT Request for Refund of Duty on Insurance taken out with Non-Registered/Unauthorised Insurers which is available for download at www.revenue.act.gov.au. The form can be lodged with the Commissioner of ACT Revenue, ACT Revenue Office, PO Box 293 Civic Square ACT 2608 and marked to the attention of Joseph Tonna, Assistant Manager- Compliance. Any enquiries can be made by calling 02 6207 0104.
As with NSW applications, clients will need to provide the ACT OSR with evidence of the duty paid. If you are an affected policyholder and you wish to obtain a refund, please let us know so that we can provide you with appropriate information (wherever possible) to enable you to do so.
- The Tasmanian OSR has indicated that it has no liability to make refunds as it believes its legislation to be different to the NSW legislation. Policyholders may wish to consider seeking advice on whether this view is able to be challenged based on similar reasoning used in the Qantas decision.
On 14 January 2010 the QLD OSR agreed to make some limited refunds of duty in relation to insurance placed with unauthorised foreign insurers and Lloyd's.
The Government made certain amendments to the QLD Duties Act which have retrospective effect on 14 January 2010. In addition, the Commissioner's assessing practice changed (on 29 April 2009 for life insurance products and on 8 December 2009 for general insurance products) as a result of the proposed legislative changes.
Originally the QLD OSR advised that it would(following application on behalf of an affected policyholder) make an automatic refund of duty on relevant premium paid to unauthorised foreign insurers and Lloyd's between 8 December 2009 and 13 January 2010 (for general insurance) and between 29 April 2009 and 13 January 2010 (for life insurance).
In accordance with the refund processes established by the QLD OSR (which can be found on its website at www. osr.qld.gov.au), JLT submitted a bulk refund for affected clients.
The QLD OSR has since informed JLT that the opportunity for refund of stamp duty only applies to insurance placed with unauthorised foreign insurers and does not include Lloyd’s as originally foreshadowed.
Tax payers who for any reason consider that the insurance duty provisions do not apply in a particular case have the right to seek a refund of duty using the objection and appeal process under the Taxation Administration Act.
Affected policyholders may wish to consider any rights to refund they may have in addition to the refunds being allowed by the QLD OSR and, if appropriate, seek their own legal advice on this issue.
Please contact your broker for further information.