08 June 2010
As part of the budget package released today by the New South Wales Treasurer, the State Revenue Legislation Amendment Bill 2010 was introduced.
Amongst a number of other changes, the Bill contains a new exemption for asset-backed securities and related transactions. Assuming the Bill passes both Houses of Parliament this exemption will become effective on 1 July 2010.
Clients familiar with the equivalent exemption in the Queensland Duties Act will recognise that the new definition of "financial asset" is based on the Queensland definition of that term. A financial asset therefore includes a loan, a credit card account, a hire purchase agreement, a lease, a floorplan agreement and, reaching beyond Queensland's definition, an insurance contract or other financial service/product contract.
The breadth of this definition should allow most asset-backed securitisations to enjoy, for the first time in New South Wales, an exemption from mortgage duty upon establishment of the program or the series. Alongside this exemption is the comfort offered by express exemptions for the issue, transfer or termination of asset-backed securities.This is indeed a welcome development for the industry.