We have sought guidance from the ATO on this query and their response is set out below:
“In considering this issue we examined the standard form contract for sale of land (Victoria) as we needed to ensure that in nominating a substitute transferee (i.e. a person not party to the contract) it did not cause a new contract to be formed between the seller and the substitute transferee.
We are satisfied that clause 18. of the general conditions of the standard form contract for sale of land (Victoria) permits the purchaser to nominate a substitute or additional purchaser. We understand this to mean that where this clause is relied on, the purchaser is exercising a right under the existing contract to have the property transferred to some other person. For FRCGW purposes the transaction would be taken to be entered into when the contract was exchanged, and the subsequent exercise of rights under that contract to nominate a substitute transferee would not cause a new transaction to have been entered into.
If the contract was exchanged prior to 1 July 2016, but the substitute transferee was nominated after this date, subdivision 14-D would not apply as the transaction was not entered into after the start date of the relevant provisions (meaning no clearance certificate is required in this instance).
Where the contract was exchanged after 1 July 2016 the substitute transferee would have the withholding obligation (provided the elements of section 14-200 were satisfied).”