DA152.1.1—Correcting a clerical error in a previous transfer

1. Section 152 of the Duties Act 2001 (the Duties Act) provides that transfer duty is not imposed on a dutiable transaction to correct a clerical error in a previous dutiable transaction about the same property if:
   1. no additional consideration is paid or payable
      
      and
      
      
   2. the beneficial interests in the property change only to the extent necessary to correct the error.
2. Property may be transferred in error, for example, when the wrong property is transferred or when the property has been transferred to the wrong person.
3. This Public Ruling addresses the information that is required to satisfy the Commissioner that a clerical error of a type contemplated by s.152 of the Duties Act has occurred in a previous transfer and also contains examples of when and how the provision applies.

4. The exemption only applies to a dutiable transaction which either returns the parties to their original positions or places the parties in their correct positions.
5. For the exemption to apply, the following facts must be established:
   1. There must be a clerical error in a previous dutiable transaction (the defective transaction), such as an accidental misdescription of the property or a party to the transaction.
   2. The dutiable transaction being considered for the exemption (the correcting transaction) must be entered into to correct the clerical error in the defective transaction.
   3. The correcting transaction must be for the same property transferred by the defective transaction.
   4. There must be no additional consideration for the correcting transaction.
   5. If the correcting transaction alters the beneficial interest in the property, it does so only to the extent necessary to correct the clerical error.
6. To claim an exemption under s.152 of the Act, evidence must be produced to establish each of the facts in paragraph 5. This evidence must include statutory declarations by all parties to the defective transaction and the correcting transaction as to each of those facts with a full explanation of the facts and circumstances that led to the clerical error being made.
7. Section 152 does not affect the duty payable on the defective dutiable transaction.

Example 1

A intended to convey Blackacre to C. By mistake, the incorrect name of the transferee was inserted in the transfer. This resulted in A transferring Blackacre to B instead of C.

Two ways this error might be corrected are as follows.

Alternative 1

B signs a transfer of Blackacre back to A.
A signs a transfer of Blackacre to C.

The first transfer will be exempt from transfer duty under s.152 of the Act.
The second transfer will also be exempt from transfer duty under s.152 of the Act.

Alternative 2

B signs a transfer of Blackacre to C.

This transfer will be exempt from transfer duty under s.152 of the Act.

Example 2

Blackacre is conveyed by A to B. A intended to convey Whiteacre to B. The solicitor for A filled in the incorrect real property description on the transfer. This resulted in A transferring Blackacre, instead of Whiteacre, to B.
 
B may transfer Blackacre back to A. Section 152 of the Act will apply so the transfer will be exempt from transfer duty.

However, if A subsequently transfers Whiteacre to B, this transfer will not be exempt because it is not the same property. Duty will have been paid on the conveyance of Blackacre from A to B and duty will be payable on the conveyance of Whiteacre from A to B.

8. This Public Ruling takes effect from the date of issue. 

 

David Smith
Commissioner of State Revenue
Date of issue 24 February 2009

Public Ruling	Issued	Dates of effect
		From	To
DA152.1.1	24 February 2009	24 February 2009	Current
Supersedes Practice Direction DA 55.2	22 November 2006	22 November 2006	23 February 2009