In brief - the object of the State Revenue Legislation Further Amendment Bill is to make amendments to the Duties Act 1997, the Land Tax Act 1956 and the Land Tax Management Act 1956

The Bill was introduced to Parliament on 22 October 2019 and is due to be debated five calendar days from this date.

Amendments to the Duties Act 1997

The Bill proposes the inclusion of section 104JA, which makes special provision for the liability for surcharge purchaser duty of foreign trustees when the trust is a discretionary trust. A trustee of a discretionary trust is taken to be a foreign trustee (and so is liable for surcharge purchaser duty as the transferee of residential land) if the terms of the trust do not prevent a foreign person from being a beneficiary. If the terms of the trust prevent a foreign person from being a beneficiary, the trustee is not a foreign trustee for surcharge purchaser duty purposes.

A proposed amendment to Schedule 1 provides transitional arrangements for proposed section 104JA, including provision for surcharge purchaser duty exemptions and refunds when the terms of a discretionary trust have been amended before the end of 2019 to prevent a foreign person from being a beneficiary. The trustee of a discretionary trust arising under a will where the deceased dies within two years after the commencement of section 104JA, will not be a foreign trustee if the deceased was not a foreign person.

A section 104ZQ(4) is proposed to be added to allow the Chief Commissioner to approve a manner of stamping or endorsement, so that stamping or endorsement by means of a single unique transaction identifier or reference number or a single endorsement is sufficient to indicate payment of both purchaser duty and surcharge purchaser duty.

A section 107(2)(c) is proposed to be added which includes another situation in which a person is to be treated as having assigned their right under a call option to purchase dutiable property to a third party, the situation of an agreement or arrangement whereby the option holder relinquishes that right for valuable consideration and the owner of the property agrees to sell to the third party.

The Bill proposes to amend section 146 of the Duties Act 1997 by removing the words "a threshold value" and replacing them with "an unencumbered value". This proposed change means that the unencumbered value of the land is now used to determine the threshold for the application of the section.

Section 146A, which details the threshold value of land holdings, is proposed to be repealed.

A section 147A is proposed to be added which elaborates on the definition of "land", generally, "land includes anything fixed to land whether or not a fixture".

Schedule 4.2 (amendment of section 78A) seeks to adjust the method of calculating the rate of duty payable on a transaction that is subject to a duty concession under the First Home Buyers Assistance Scheme. The adjusted method of calculation ensures that the amount of the duty concession is not reduced by operation of the indexation of dutiable value thresholds for the purpose of calculating the general rate of duty. The amendment is consequent on the enactment of the State Revenue and Other Legislation Amendment Act 2019

Land Tax Act 1956

The Bill seeks to add a section 5D which states that a trustee of a discretionary trust is taken to be a foreign person (and so is liable for surcharge land tax as the owner of residential land) if the terms of the trust do not prevent a foreign person from being a beneficiary. If the terms of the trust prevent a foreign person from being a beneficiary, the trustee is not a foreign person for surcharge land tax purposes.

Land Tax Management Act 1956

The Land Tax Management Act 1956 is proposed to be amended in similar terms to the Land Tax Act 1956 by providing for surcharge land tax exemptions and refunds, if the terms of a discretionary trust have been amended before the end of 2019 to prevent a foreign person being a beneficiary. 

In addition, the trustee of a discretionary trust arising under a will where the deceased died within wo years after the commencement of proposed section 5D of the Land Tax Act 1956 will not be a foreign person if the deceased was not a foreign person. These amendments are proposed to appear in Schedule 2.

Aboriginal Land Rights Regulation 2014

A substitution of clauses 110 and 111 and repeal of Schedule 6 adjusts the method of calculating the amount of the community development levy payable by a Local Aboriginal Land Council for a dutiable transaction so that it aligns with the indexation of dutiable value thresholds under the Duties Act 1997. The amendment is consequent on the enactment of the State Revenue and Other Legislation Amendment Act 2019.

We will continue to monitor the Bill and issue a further update in the event there are any changes to the above information.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2019.

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