State Taxation Acts Amendment Act 2015...Part 2—Amendment of Duties Act 2000 State Taxation Acts...

Authorised by the Chief Parliamentary Counsel

Authorised Version

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State Taxation Acts Amendment Act 2015 No. 26 of 2015

TABLE OF PROVISIONS Section Page

Part 1—Preliminary 1 1 Purposes 1 2 Commencement 2

Part 2—Amendment of Duties Act 2000 4

Division 1—General 4

3 Definitions—section 3 4 4 Who is an eligible pensioner? 6 5 What is a relevant acquisition? 6 6 Conversion of a private unit trust scheme to a public unit trust

scheme 6 7 Conversion of a private company to a listed company 7 8 Definitions—Registration of unit trust schemes 7 9 What insurance is exempt from duty? 7 10 Primary producer vehicles 7 11 New sections 233AA and 233AB inserted 9 12 New Schedule 1 inserted 10 13 Amendments to Schedule 1 15

Division 2—Duty payable by foreign purchasers 16 14 Definitions 16 15 New sections 3A to 3F inserted 18 16 New section 18A inserted 25 17 New section 19A inserted 26 18 What is the consideration for the transfer of dutiable property? 26 19 Partitions of land 26 20 New section 28A inserted 27 21 Provisions for determining consideration 27 22 Imposition of duty 27 23 How duty is charged on relevant acquisitions in public

landholders—concessional rate 28 24 Amendment of Schedule 2 28

Part 3—Amendment of Land Tax Act 2005 29

25 Definitions 29 26 New sections 3A to 3C inserted 31

Section Page

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27 Holders of beneficial interests 35 28 Who is liable for special land tax? 35 29 What is the rate of land tax? 36 30 Assessment of joint owners of land 36 31 Joint assessments in the case of principal place of residence

land 38 32 New Division 2AB of Part 3 inserted 38 33 New Division heading inserted into Part 3 56 34 Trustee's right of reimbursement 57 35 New Division 3A of Part 3 inserted 57 36 Consequential repeal of definition of specified beneficiary 58 37 New section 104B inserted 58 38 New Parts 4 and 5 of Schedule 1 inserted 58

Part 4—Amendment of Taxation Administration Act 1997 61

Division 1—Refunds and offsets 61 39 Section 20 substituted and new section 20A inserted 61 40 Refund of amount 62 41 Section 116 substituted 62 42 Schedule 1 amended 64 43 Consequential amendment—Back to Work Act 2015 65

Division 2—Absentee owner land tax surcharge 65 44 Definitions 65 45 Amount of penalty tax 65

Part 5—Repeal of amending Act 66 46 Repeal of amending Act 66

Endnotes 67

1 General information 67


Authorised Version

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State Taxation Acts Amendment Act

2015† No. 26 of 2015

[Assented to 29 June 2015]

The Parliament of Victoria enacts:

Part 1—Preliminary 1 Purposes

The main purposes of this Act are—

(a) to amend the Duties Act 2000—

(i) to alter definitions in relation to companies, shares and units; and

Victoria

Part 1—Preliminary


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(ii) to update references to Commonwealth legislation in relation to Seniors Health Cards and private health insurance; and

(iii) to clarify the circumstances in which a person makes a relevant acquisition in a landholder for the purposes of Part 2 of Chapter 3; and

(iv) to exempt mobile plant and special purpose vehicles (type P) from motor vehicle duty and to update definitions for the purposes of motor vehicle duty; and

(v) to set the rate for an additional duty chargeable in respect of transfers of residential property to foreign purchasers; and

(vi) to make technical amendments; and

(b) to amend the Land Tax Act 2005 to impose a surcharge on land owned by absentee owners; and

(c) to amend the Taxation Administration Act 1997—

(i) in relation to tax offsets and tax refunds; and

(ii) to impose penalty tax on a person who fails to notify the Commissioner that the person is an absentee owner; and

(d) to consequentially amend the Back to Work Act 2015.

2 Commencement (1) This Act (except sections 4, 9, 11 and 13 and

Division 2 of Part 2) comes into operation on the day after the day on which it receives the Royal Assent.

Part 1—Preliminary


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(2) Section 4 is taken to have come into operation on 1 July 2011.

(3) Section 9 is taken to have come into operation on 1 April 2007.

(4) Sections 11 and 13 and Division 2 of Part 2 come into operation on 1 July 2015.

Part 2—Amendment of Duties Act 2000


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Division 1—General 3 Definitions—section 3

In section 3(1) of the Duties Act 2000—

(a) insert the following definitions—

"compliance plate means a plate authorised to be placed on a vehicle, or taken to have been placed on a vehicle, under the Motor Vehicle Standards Act 1989 of the Commonwealth;

GVM has the same meaning as in the Road Safety Act 1986;

load, in relation to a vehicle, includes anything that is removed from the vehicle when not in use;";

(b) for paragraph (b) of the definition of motor vehicle substitute—

"(b) a heavy trailer, other than in section 233 and Schedule 1;";

(c) for the definition of MRC substitute—

"MRC (mass rating for charging), in relation to a vehicle, means—

(a) the maximum mass of the vehicle, including any load, recorded on the compliance plate as the GVM, gross trailer mass rating or aggregate trailer mass of the vehicle; or

(b) in relation to a vehicle for which there is no compliance plate—its maximum mass, including any load;";



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(d) for the definition of private company substitute—

"private company means a corporation that is not a listed company;";

(e) for the definition of shares substitute—

"shares means—

(a) subject to paragraph (b), shares or rights to shares; and

(b) for the purposes of the definition of listed company, shares that entitle the shareholder to a distribution of the property of the company on a winding up of the company, other than a return of capital paid in respect of the shares;";

(f) for the definition of unit substitute—

"unit in a unit trust scheme means—

(a) subject to paragraphs (b) and (c), a right or interest (whether described as a unit or a sub-unit or otherwise) of a beneficiary under the scheme, or a right to any such right or interest; and

(b) for the purposes of the definition of listed trust, a right or interest (whether described as a unit or a sub-unit or otherwise) of a beneficiary under the scheme that entitles the beneficiary to participate proportionately with other unit holders in a distribution of the property of the trust on its vesting, other than a return of



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capital paid in respect of the unit; and

(c) for the purposes of the definition of widely held trust and Part 2 of Chapter 3—

(i) a right or interest (whether described as a unit or a sub-unit or otherwise) of a beneficiary under the scheme that entitles the beneficiary to participate proportionately with other unit holders in a distribution of the property of the trust on its vesting; or

(ii) a right to any such right or interest;";

(g) the definition of National Schedule is repealed.

4 Who is an eligible pensioner? In section 58(1)(a)(ii) of the Duties Act 2000, for "issued under section 1061ZS" substitute "within the meaning".

5 What is a relevant acquisition? In section 78(1)(b) of the Duties Act 2000, for "the person," substitute "the person referred to in paragraph (a) or".

6 Conversion of a private unit trust scheme to a public unit trust scheme

In section 89B(5) of the Duties Act 2000, for "subsection (3)(b)" substitute "subsection (4)(b)".



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7 Conversion of a private company to a listed company

In section 89C(5) of the Duties Act 2000, for "subsection (3)(b)" substitute "subsection (4)(b)".

8 Definitions—Registration of unit trust schemes In section 89P(4)(a) of the Duties Act 2000 omit ", (i)".

9 What insurance is exempt from duty? In section 196(a) of the Duties Act 2000, for "an organisation registered under Part VI of the National Health Act 1953" substitute "a private health insurer within the meaning of the Private Health Insurance Act 2007".

10 Primary producer vehicles (1) For section 233(2)(c) of the Duties Act 2000

substitute—

"(c) a special work vehicle.".

(2) For section 233(3)(c) of the Duties Act 2000 substitute—

"(c) a special work vehicle.".

(3) In section 233(4) of the Duties Act 2000, for "Special Purpose Vehicle (type 2) as defined in Part 2 of the National Schedule" substitute "special purpose vehicle (type O) as defined in clause 1 of Schedule 1".

(4) In section 233(5) of the Duties Act 2000—

(a) insert the following definitions—

"agricultural task includes cultivation of land, growing and harvesting of crops and rearing of livestock;



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agricultural trailer means a trailer designed to carry a load and used exclusively to perform agricultural tasks, but does not include—

(a) a semi-trailer; or

(b) a trailer (other than a trailer specifically constructed to carry a boat) that—

(i) is not used in the course of trade; and

(ii) weighs less than 200 kilograms unladen; and

(iii) does not exceed in width the width of its towing vehicle as produced by the manufacturer; and

(iv) is not more than 3·0 metres long, including the part of the trailer that connects the trailer body to a coupling for towing purposes and any load;

semi-trailer has the same meaning as in the Road Safety Act 1986;

special work vehicle means a motor vehicle—

(a) with an MRC not exceeding 4·5 tonnes and that is not constructed as a tractor; and

(b) that is primarily constructed and used for off-road transportation; and

(c) that is undertaking agricultural maintenance or service tasks; and



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(d) that does not comply with an Australian Design Rule;

trailer has the same meaning as in the Road Safety Act 1986.";

(b) for the definition of agricultural implement substitute—

"agricultural implement means—

(a) a vehicle without its own motive power, not designed to carry a load and used exclusively to perform agricultural tasks; or

(b) an agricultural trailer;";

(c) in the definition of primary producer—

(i) in paragraph (a), for "pursuits" substitute "activities";

(ii) for paragraph (b) substitute—

"(b) who is the holder of a licence under the Fisheries Act 1995 to take fish for sale;";

(d) the definition of primary producer special vehicle is repealed;

(e) in the definition of residential address, for "address." substitute "address;".

11 New sections 233AA and 233AB inserted After section 233 of the Duties Act 2000 insert—

"233AA Mobile plant No duty is chargeable under this Chapter on an application for registration or transfer of registration of a mobile plant as defined in clause 1A of Schedule 1.



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233AB Special purpose vehicles (type P) No duty is chargeable under this Chapter on an application for registration or transfer of registration of a special purpose vehicle (type P) as defined in clause 1B of Schedule 1.".

12 New Schedule 1 inserted Before Schedule 2 of the Duties Act 2000 insert—

"Schedule 1—Special Purpose Vehicle (Type O)

Section 233(4)

1 Special purpose vehicle (type O) For the purposes of section 233(4)—

special purpose vehicle (type O) means a special purpose vehicle (other than a special purpose vehicle (type P))—

(a) built, or permanently modified, primarily for use on roads; and

(b) that has at least one axle or axle group loaded in excess of the axle load limits specified in the Table at the foot of this definition.

Example

Mobile cranes, fire engines, truck-mounted concrete pumps and boring plants are special purpose vehicles (type O).



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Table

Axle load limits

Column 1 Item No.

Column 2 Type of axle or axle group

Column 3 Axle load limit

1 Single axles

(a) 2 tyres 6⋅0 tonnes

(b) 2 wide profile tyres—

(i) 375 millimetres to 450 millimetres

6⋅7 tonnes

(ii) over 450 millimetres

7⋅0 tonnes

(c) 4 or more tyres—

(i) on pig trailers 8⋅5 tonnes

(ii) on other vehicles 9⋅0 tonnes

2 Twinsteer axle groups

(a) non-load-sharing suspensions

10⋅0 tonnes

(b) load-sharing suspensions

11⋅0 tonnes

3 Tandem axle groups

(a) 4 tyres 11⋅0 tonnes

(b) 4 wide profile tyres—

(i) 375 millimetres to 450 millimetres

13⋅3 tonnes

(ii) over 450 millimetres

14⋅0 tonnes

(c) 6 tyres 13⋅0 tonnes



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Column 1 Item No.

Column 2 Type of axle or axle group

Column 3 Axle load limit

(d) 8 or more tyres—



4 Tri-axle groups

(a) 6, 8 or 10 tyres 15⋅0 tonnes

(b) 6 wide profile tyres (375 millimetres or over)—



(c) 12 or more tyres—



2 Definitions In this Schedule—

axle group means a single axle group, tandem axle group, twinsteer axle group, tri-axle group, quad-axle group or oversize tri-axle group;

drawbar means a part of a trailer, other than a semi-trailer, that connects the trailer body to a coupling for towing purposes;

light motor vehicle means a motor vehicle with an MRC not exceeding 4·5 tonnes;

light trailer means a trailer with an MRC not exceeding 4·5 tonnes;

light vehicle means a light motor vehicle or light trailer;



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oversize tri-axle group means a group of 3 axles in which the horizontal distance between the centre lines of each axle is 1·8 metres;

pig trailer means a trailer—

(a) with one axle group or single axle near the middle of its load-carrying surface; and

(b) that connects to the vehicle towing it by a drawbar;

quad-axle group means a group of 4 axles, in which the horizontal distance between the centre lines of the outermost axles is more than 3·2 metres but not more than 4·9 metres;

road has the same meaning as in the Road Safety Act 1986;

road related area has the same meaning as in the Road Safety Act 1986;

semi-trailer has the same meaning as in the Road Safety Act 1986;

single axle means an axle not forming part of an axle group;

single axle group means a group of 2 or more axles, in which the horizontal distance between the centre lines of the outermost axles is less than 1⋅0 metre;

special purpose vehicle has the same meaning as in section 116(4) of the Heavy Vehicle National Law (Victoria);

special purpose vehicle (type P) means a special purpose vehicle built, or permanently modified, primarily for—



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(a) off-road use; or

(b) use on a road related area; or

(c) use on an area of road that is under construction or repair;

Example

Agricultural tractors, self-propelled agricultural harvesters, bulldozers, backhoes, graders and front-end loaders are special purpose vehicles (type P).

tandem axle group means a group of at least 2 axles, in which the horizontal distance between the centre lines of the outermost axles is at least 1⋅0 metre, but not more than 2⋅0 metres;

trailer has the same meaning as in the Road Safety Act 1986;

tri-axle group means a group of at least 3 axles, in which the horizontal distance between the centre lines of the outermost axles is more than 2·0 metres, but not more than 3·2 metres;

twinsteer axle group means a group of 2 axles—

(a) with single tyres; and

(b) fitted to a motor vehicle; and

(c) connected to the same steering mechanism; and

(d) the horizontal distance between the centre lines of which is at least 1·0 metre, but not more than 2·0 metres;

vehicle has the same meaning as in the Road Safety Act 1986.".



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13 Amendments to Schedule 1 (1) For the heading to Schedule 1 to the Duties Act

2000 substitute—

"Schedule 1—Special purpose vehicles and mobile plant".

(2) In Schedule 1 to the Duties Act 2000, for "Section 233(4)" (where first occurring immediately after the heading to the Schedule) substitute "Sections 233, 233AA and 233AB".

(3) After clause 1 of Schedule 1 to the Duties Act 2000 insert—

"1A Mobile plant For the purposes of section 233AA—

mobile plant means a motor vehicle with an MRC not exceeding 4·5 tonnes, including a tractor—

(a) that is not designed solely for carrying passengers; and

(b) for which the carrying of a load is incidental to the purpose for which the vehicle was constructed, except water in the case of concrete pumps and fire trucks; and

(c) that is not a tow truck.

1B Special purpose vehicle (type P) For the purposes of section 233AB—

special purpose vehicle (type P) means a special purpose vehicle built, or permanently modified, primarily for—

(a) off-road use; or

(b) use on a road related area; or



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(c) use on an area of road that is under construction or repair.

Example

Agricultural tractors, self-propelled agricultural harvesters, bulldozers, backhoes, graders and front-end loaders are special purpose vehicles (type P).".

(4) In clause 2 of Schedule 1 to the Duties Act 2000—

(a) insert the following definition—

"tractor has the same meaning as in the Road Safety Act 1986;";

(b) for the definition of special purpose vehicle (type P) substitute—

"special purpose vehicle (type P) has the same meaning as in clause 1B;".

Division 2—Duty payable by foreign purchasers 14 Definitions

In section 3(1) of the Duties Act 2000 insert the following definitions—

"controlling interest has the meaning given by section 3A;

foreign corporation means—

(a) a corporation that is incorporated outside Australia; or

(b) a corporation in which one of the following persons has a controlling interest—

(i) a foreign natural person;

(ii) another foreign corporation;

(iii) the trustee of a foreign trust;



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foreign natural person means a natural person who is not any of the following—

(a) an Australian citizen within the meaning of the Australian Citizenship Act 2007 of the Commonwealth;

(b) the holder of a permanent visa within the meaning of section 30(1) of the Migration Act 1958 of the Commonwealth;

(c) a New Zealand citizen who is the holder of a special category visa within the meaning of section 32(1) of the Migration Act 1958 of the Commonwealth;

foreign purchaser means a transferee (for the purposes of Chapter 2) or a person who makes a relevant acquisition (for the purposes of Chapter 3), and that transferee or person is—

(a) a foreign natural person; or

(b) a foreign corporation; or

(c) the trustee of a foreign trust;

foreign trust means a trust in which one of the following persons has a substantial interest in the trust estate—

(a) a foreign corporation;

(b) a foreign natural person;

(c) another person that holds the substantial interest as trustee of another foreign trust;

land-related interest means an interest or estate in land referred to in section 10(1)(a) to (ac) or (e);



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potential voting power has the same meaning as in the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth;

residential property means land in Victoria—

(a) on which there is a building affixed that—

(i) is designed and constructed solely or primarily for residential purposes; and

(ii) may lawfully be used as a place of residence; or

(b) on which a foreign purchaser intends to affix a building that—

(i) is designed and constructed solely or primarily for residential purposes; and

(ii) may lawfully be used as a place of residence;

substantial interest has the meaning given by section 3B;

voting power has the same meaning as in the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth;".

15 New sections 3A to 3F inserted After section 3 of the Duties Act 2000 insert—

"3A What is a controlling interest in a foreign corporation?

(1) For the purposes of the definition of foreign corporation in section 3(1), a person has a controlling interest in the foreign corporation if the person—



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(a) is in a position to control more than 50% of the voting power in the corporation; or

(b) is in a position to control more than 50% of the potential voting power in the corporation; or

(c) has an interest in more than 50% of the issued shares in the corporation; or

(d) is a person in respect of whom the Commissioner has made a determination under section 3C.

(2) Subsection (1) applies whether or not the person has the controlling interest alone or together with an associated person.

(3) For the purposes of this section, a reference to control of the voting power in a foreign corporation is a reference to control that is direct or indirect, including control that is exercisable as a result or by means of arrangements or practices, whether or not having legal or equitable force, and whether or not based on legal or equitable rights.

(4) For the purposes of this section, to determine how much potential voting power a person is in a position to control at a particular time, section 14(3) of the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth is to be applied.

3B What is a substantial interest in a trust estate?

(1) For the purposes of the definition of foreign trust in section 3(1), a person has a substantial interest in the trust estate if—



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(a) the person has a beneficial interest of more than 50% of the capital of the estate of the foreign trust; or

(b) the Commissioner has made a determination under section 3D in respect of the person.

(2) If, under the terms of a foreign trust, a trustee has a power or discretion as to the distribution of the capital of the trust estate to a person or a member of a class of person, any such person is taken to have a beneficial interest in the maximum percentage of the capital of the foreign trust estate that the trustee is empowered to distribute to that person.

(3) Subsection (1) applies whether or not the person has the substantial interest alone or together with an associated person.

3C Commissioner may determine person has a controlling interest in a corporation

(1) For the purposes of section 3A(1)(d), the Commissioner may determine that a person has a controlling interest in a corporation if, in the Commissioner's opinion, the person has the capacity to determine or influence, directly or indirectly, the outcome of decisions about the corporation's financial and operating policies, taking into account—

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(b) any practice or behaviour affecting the corporation's financial or operating polices (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).



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(2) This section applies regardless of any interests that any other person has in the corporation.

3D Commissioner may determine person has a substantial interest in a trust

(1) For the purposes of section 3B(1)(b), the Commissioner may determine that a person has a substantial interest in a trust estate if, in the Commissioner's opinion, the person has the capacity to determine or influence the outcome of decisions about the administration and conduct of the trust, taking into account—

(a) the practical influence the person can exert in addition to any rights the person can enforce; and

(b) any practice or behaviour affecting the trustee's administration and conduct of the trust (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

(2) This section applies regardless of any interests that any other person has in the trust estate.

3E Exemptions from holding controlling interests in foreign corporations or substantial interests in trust estates of foreign trusts

(1) Despite sections 3A, 3B, 3C and 3D, a person is taken not to have a controlling interest in a foreign corporation, or a substantial interest in the trust estate of a foreign trust, if the person has an exemption under subsection (2).



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(2) The Treasurer, for the purposes of subsection (1), may, in writing, exempt a person who has a controlling interest in a foreign corporation, or a substantial interest in the trust estate of a foreign trust, if the Treasurer is satisfied that, having regard to any one or more of the following matters, the person should not be taken to have that interest—

(a) in the case of a person who has a controlling interest in a foreign corporation—

(i) the nature and degree of ownership and control the person has in the corporation;

(ii) the practical influence the person exerts or any rights the person enforces to determine or influence, directly or indirectly, the outcome of decisions about the corporation's financial and operating policies;

(iii) any practice or behaviour of the person affecting the corporation's financial or operating policies;

(iv) any other relevant circumstances;

(b) in the case of a person who has a substantial interest in the trust estate of a foreign trust—

(i) the nature and degree of the person's beneficial interest in the capital of the estate of the trust;

(ii) the practical influence the person exerts or any rights the person enforces to determine or influence, directly or indirectly,



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the outcome of decisions about the administration and conduct of the trust;

(iii) any practice or behaviour of the person affecting the trustee's administration and conduct of the trust;

(iv) any other relevant circumstances.

(3) At least once every 6 months the Treasurer must cause to be laid before each House of Parliament, and publish on an appropriate government website, a report setting out—

(a) in respect of the exemptions (if any) granted by the Treasurer under subsection (2) during the period covered by the report—

(i) the number of exemptions; and

(ii) the name of each foreign corporation or foreign trust in relation to which an exemption was granted; and

(iii) the value of each exemption, being the amount of duty foregone, or likely to be foregone, by the State because of the exemption; and

(b) in respect of the exemptions (if any) granted by the Commissioner or a member of staff of the State Revenue Office during the period covered by the report under a delegation under section 3F—




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(ii) the total value of the exemptions, being the total amount of duty foregone, or likely to be foregone, by the State because of the exemptions.

(4) The Treasurer must issue guidelines for the exercise of the power of exemption under subsection (2).

(5) The Treasurer must cause guidelines issued under subsection (4) to be published in the Government Gazette.

(6) Guidelines issued under subsection (4) are not a legislative instrument within the meaning of the Subordinate Legislation Act 1994.

3F Delegation of exemption power (1) The Treasurer may delegate, by instrument,

to the Commissioner—

(a) the power of the Treasurer to exempt a person under section 3E(2);

(b) the power to delegate the power delegated under paragraph (a).

(2) If power has been delegated under subsection (1)(b), the Commissioner may, subject to the terms of the instrument of delegation, sub-delegate, by instrument, to a member of staff of the State Revenue Office the power that is the subject of the delegation, other than the power of sub-delegation.

(3) Subject to subsection (4), sections 42 and 42A of the Interpretation of Legislation Act 1984 apply in relation to a sub-delegation in the same manner as they apply in relation to a delegation.



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(4) Despite section 42A(1)(a) of the Interpretation of Legislation Act 1984, the Treasurer cannot exercise the power to exempt a person under section 3E(2) while a delegation under subsection (1)(a) is in effect.

(5) In this section—

member of staff of the State Revenue Office means—

(a) an employee referred to in section 67 of the Taxation Administration Act 1997; or

(b) a consultant or contractor engaged under section 68 of that Act.".

16 New section 18A inserted After section 18 of the Duties Act 2000 insert—

"18A Foreign purchasers—duty in respect of change of use of land

(1) This section applies if—

(a) on or after 1 July 2015, under a dutiable transaction, a land-related interest in property that is not residential property is transferred to a foreign purchaser; and

(b) after the land-related interest is transferred, the foreign purchaser forms an intention to affix a building on the land that is subject to the land-related interest that—

(i) is designed and constructed solely or primarily for residential purposes; or

(ii) may lawfully be used as a place of residence.



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(2) Within 14 days after the foreign purchaser forms the intention, the foreign purchaser must lodge with the Commissioner a statement of the foreign purchaser's intention.

(3) Within 30 days after the foreign purchaser forms the intention, the foreign purchaser must pay duty in relation to the land-related interest in residential property at a rate of 3% of the dutiable value of the interest at the time that it was transferred.".


"19A Foreign purchasers not entitled to concessions A foreign purchaser is not entitled to a concession from duty or a concessional rate of duty under Part 5 in respect of any duty determined in accordance with the rate set out in section 18A or 28A.".

18 What is the consideration for the transfer of dutiable property?

After section 21(4A) of the Duties Act 2000 insert—

"(4B) Subsection (3) or (4) does not apply when determining the duty chargeable at the rate set out in section 18A or 28A.".

19 Partitions of land At the end of section 27 of the Duties Act 2000 insert—

"(2) Subsection (1) does not apply when determining the duty chargeable at the rate set out in section 18A or 28A.".



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"28A Rate for additional duty chargeable for foreign purchasers—residential property

(1) This section applies to a dutiable transaction under which a land-related interest in residential property is transferred to a foreign purchaser.

(2) In addition to the duty chargeable under section 28, duty is also chargeable at a rate of 3% of the dutiable value of the land-related interest in residential property.".

21 Provisions for determining consideration After section 32V(4B) of the Duties Act 2000 insert—

"(4C) Subsection (3) or (4) does not apply when determining the duty chargeable at the rate set out in section 18A or 28A.".

22 Imposition of duty (1) At the end of section 70 of the Duties Act 2000

insert—

"(2) In the case of a foreign purchaser, in respect of a relevant acquisition of an interest in a landholder that holds a land-related interest in residential property, the duty chargeable is the duty determined at the same rates as for a dutiable transaction under which a land-related interest in residential property is transferred to a foreign purchaser under Chapter 2.".

(2) In the note to section 70 of the Duties Act 2000, after "Chapter 2" insert ", and in relation to foreign purchasers, also at the rate set out in section 28A in Chapter 2".



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23 How duty is charged on relevant acquisitions in public landholders—concessional rate

After section 87(3) of the Duties Act 2000 insert—

"(3A) Subsection (1) does not apply when determining the duty chargeable at the rate set out in section 28A.".

24 Amendment of Schedule 2 After clause 32 in Schedule 2 to the Duties Act 2000 insert—

"33 State Taxation Acts Amendment Act 2015 (1) Chapter 2, as in force immediately before

1 July 2015, applies in respect of any dutiable transaction entered into before that day under which a land-related interest in residential property is transferred to a foreign purchaser.

(2) Chapter 3, as in force immediately before 1 July 2015, applies in respect of any relevant acquisition of an interest in a landholder that holds a land-related interest in residential property if the agreement or arrangement for the relevant acquisition was entered into by a foreign purchaser before that day.".

Part 3—Amendment of Land Tax Act 2005


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Part 3—Amendment of Land Tax Act 2005 25 Definitions

In section 3(1) of the Land Tax Act 2005 insert the following definitions—

"absentee beneficiary, of a trust, means—

(a) a natural person absentee who, or an absentee corporation that—

(i) has a beneficial interest in land subject to a fixed trust; or

(ii) is a unitholder in a unit trust scheme; or

(iii) is a specified beneficiary of a discretionary trust; or

(b) a person who is not an absentee person who—

(i) has a beneficial interest in land subject to a fixed trust and holds that interest as a trustee of an absentee trust; or

(ii) is a unitholder in a unit trust scheme and holds unitholdings in that unit trust scheme as a trustee of an absentee trust; or

(iii) is a specified beneficiary of a discretionary trust in the capacity as a trustee of an absentee trust;

absentee controlling interest has the meaning given in section 3A;

absentee corporation means—

(a) a corporation that is incorporated outside Australia; or



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(b) a corporation in which an absentee person has an absentee controlling interest;

absentee owner means an absentee person who is an owner of land;

absentee person means—

(a) a natural person absentee; or

(b) an absentee corporation; or

(c) a trustee of an absentee trust;

absentee trust means a trust under which at least one absentee beneficiary—

(a) has a beneficial interest in land subject to a fixed trust; or

(b) is a unitholder in a unit trust scheme; or

(c) is a specified beneficiary of a discretionary trust;

Australian citizen or resident means—

(a) an Australian citizen within the meaning of the Australian Citizenship Act 2007 of the Commonwealth; or

(b) the holder of a permanent visa within the meaning of section 30(1) of the Migration Act 1958 of the Commonwealth; or

(c) a New Zealand citizen who is the holder of a special category visa within the meaning of section 32(1) of the Migration Act 1958 of the Commonwealth;

natural person absentee means a natural person who is not an Australian citizen or resident and—



31


(a) who does not ordinarily reside in Australia; and

(b) who—

(i) was absent from Australia on 31 December in the year immediately preceding the tax year; or

(ii) in the year immediately preceding the tax year, was absent from Australia for a period of at least 6 months or for periods that when added together equal a period of at least 6 months;

specified beneficiary, of a discretionary trust, means a beneficiary who is specifically named in the trust deed or specifically declared in writing pursuant to the trust deed as a beneficiary to or in whom, by the terms of the trust, the whole or any part of the trust income or property may be distributed or vested—

(a) in the event of the exercise of a power or discretion in favour of the beneficiary (whether or not that power is presently exercisable); or

(b) in the event that a discretion conferred under the trust is not exercised;".

26 New sections 3A to 3C inserted After section 3 of the Land Tax Act 2005 insert—

"3A Absentee controlling interest For the purposes of this Act, an absentee person holds an absentee controlling interest in a corporation if—



32


(a) the absentee person, or that person acting together with another absentee person, can control the composition of the board of the corporation; or

(b) the absentee person, or that person acting together with another absentee person, is in a position to cast or control the casting of more than 50% of the maximum number of votes that might be cast at a general meeting of the corporation; or

(c) the absentee person holds, or that person acting together with another absentee person hold, more than 50% of the issued share capital of a corporation.

3B Exemptions from holding absentee controlling interests

(1) Despite section 3A, an absentee person is taken not to hold an absentee controlling interest in a corporation if the absentee person holds an exemption under subsection (2).

(2) The Treasurer, for the purposes of subsection (1), may, in writing, exempt an absentee person who holds an absentee controlling interest in a corporation if the Treasurer is satisfied that, having regard to any one or more of the following matters, the absentee person should not be taken to hold that interest—

(a) the nature and degree of ownership and control the absentee person, or that person acting together with another absentee person, has in the corporation;



33


(b) the practical influence the absentee person, or that person acting together with another absentee person, exerts to determine or influence, directly or indirectly, the outcome of decisions about the corporation's financial and operating policies;

(c) any practice or behaviour of the absentee person, or that person acting together with another absentee person, which affects the corporation's financial or operating policies;

(d) any other relevant circumstances.

(3) At least once every 6 months the Treasurer must cause to be laid before each House of Parliament, and publish on an appropriate government website, a report setting out—

(a) in respect of the exemptions (if any) granted by the Treasurer under subsection (2) during the period covered by the report—


(ii) the name of each corporation in relation to which an exemption was granted; and

(iii) the value of each exemption, being the amount of land tax foregone, or likely to be foregone, by the State because of the exemption; and

(b) in respect of the exemptions (if any) granted by the Commissioner or a member of staff of the State Revenue Office during the period covered by the report under a delegation under section 3C—



34



(ii) the total value of the exemptions, being the total amount of land tax foregone, or likely to be foregone, by the State because of the exemptions.

(4) The Treasurer must issue guidelines for the exercise of the power of exemption under subsection (2).

(5) The Treasurer must cause guidelines issued under subsection (4) to be published in the Government Gazette.

(6) Guidelines issued under subsection (4) are not a legislative instrument within the meaning of the Subordinate Legislation Act 1994.

3C Delegation of exemption power (1) The Treasurer may delegate, by instrument,

to the Commissioner—

(a) the power of the Treasurer to exempt an absentee person under section 3B(2);

(b) the power to delegate the power delegated under paragraph (a).

(2) If power has been delegated under subsection (1)(b), the Commissioner may, subject to the terms of the instrument of delegation, sub-delegate, by instrument, to a member of staff of the State Revenue Office the power that is the subject of the delegation, other than the power of sub-delegation.



35


(3) Subject to subsection (4), sections 42 and 42A of the Interpretation of Legislation Act 1984 apply in relation to a sub-delegation in the same manner as they apply in relation to a delegation.

(4) Despite section 42A(1)(a) of the Interpretation of Legislation Act 1984, the Treasurer cannot exercise the power to exempt an absentee person under section 3B(2) while a delegation under subsection (1)(a) is in effect.

(5) In this section—

member of staff of the State Revenue Office means—

(a) an employee referred to in section 67 of the Taxation Administration Act 1997; or

(b) a consultant or contractor engaged under section 68 of that Act.".

27 Holders of beneficial interests In section 18 of the Land Tax Act 2005, after "Division 2A" insert "or 2AB".

28 Who is liable for special land tax? Insert the following note at the foot of section 31 of the Land Tax Act 2005— "Note

See section 35(1A) and (2).".



36


29 What is the rate of land tax? (1) For the note at the foot of section 35(1) of the

Land Tax Act 2005 substitute— "Note

Schedule 1 sets out 5 different rates of land tax. Part 1 sets out the general rates of land tax, Part 2 sets out the rate of land tax on transmission easements, Part 3 sets out the land tax surcharge rates for trusts (see also Division 2A of this Part), Part 4 sets out the general absentee owner land tax surcharge rates and Part 5 sets out the land tax surcharge rates for absentee trusts (see also Division 2AB of this Part).".

(2) After section 35(1) of the Land Tax Act 2005 insert—

"(1A) In the case of land owned by an absentee owner, the rate of special land tax is 5·5% of the taxable value of the land.".

(3) In section 35(2) of the Land Tax Act 2005, for "The rate" substitute "In any other case, the rate".

30 Assessment of joint owners of land (1) At the foot of section 38(1) of the Land Tax Act

2005 insert— "Note

Joint owners of taxable land include absentee owners who own land jointly and absentee owners who own land jointly with owners who are not absentee owners.".

(2) In section 38(2) of the Land Tax Act 2005, for "Joint" substitute "Subject to subsections (2A) and (2B), joint".

(3) After section 38(2) of the Land Tax Act 2005 insert—

"(2A) In the case where all of the joint owners of taxable land are absentee owners, the joint owners are to be jointly assessed for land tax on the land as if it were owned by an



37


absentee owner who is not a trustee of an absentee trust. Note

Under subsection (2A), the joint absentee owners will be jointly assessed for land tax at the applicable rates set out in Part 4 of Schedule 1. In addition, subsections (3) to (6) apply in relation to how each joint owner is to be separately assessed.

(2B) In the case where at least one but not all of the joint owners of taxable land is not an absentee owner, the joint owners are to be jointly assessed for land tax on the land as if it were owned by an owner who was not an absentee owner. Note

Under subsection (2B), the joint owners will be jointly assessed for land tax at the applicable rates set out in Part 1 of Schedule 1. In addition, subsections (3) to (6) apply in relation to how each joint owner is to be separately assessed.".

(4) In section 38(3) of the Land Tax Act 2005, for "Each joint owner of taxable land is also" substitute "In addition, each joint owner of taxable land is".

(5) In section 38(4)(a) and (5) of the Land Tax Act 2005, after "subsection (2)" insert ", (2A) or (2B)".

(6) In section 38(4)(b) of the Land Tax Act 2005, for

"E is the amount of land tax assessed under subsection (3)."

substitute—

"E is—

(a) in the case where subsection (2) or (2A) applies, the amount of land tax assessed under subsection (3);



38


(b) in the case where subsection (2B) applies—

(i) if the joint owner is not an absentee owner, the amount of land tax assessed under subsection (3); or

(ii) if the joint owner is an absentee owner, the amount of land tax that would have been assessed under subsection (3) if that owner were not an absentee owner or a trustee of a trust.".

(7) In section 38(6) of the Land Tax Act 2005—

(a) after "trust" (where first occurring) insert "or an absentee trust";

(b) after "subsection (2)" insert ", (2A) or (2B)".

31 Joint assessments in the case of principal place of residence land

In section 39(1)(a) of the Land Tax Act 2005, after "section 38(2)" insert ", (2A) or (2B)".

32 New Division 2AB of Part 3 inserted After section 46I of the Land Tax Act 2005 insert—

"Division 2AB—Land held on trust under absentee trusts

46IA Land tax surcharge for absentee trusts (1) A person who is the owner of land as trustee

of an absentee trust is liable for land tax determined—

(a) if the absentee trust is a fixed trust or a unit trust scheme, using the formula—

( )A B C 0·5%= + ×



39


where—

A is the amount of assessed land tax that is payable;

B is the amount determined by applying the applicable rate set out in Part 3 of Schedule 1;

C is—

(a) in the case of an absentee trust that is a fixed trust, the value of all land subject to the trust that would be taken under section 46IB to be owned by an absentee beneficiary if a notice were in force under section 46B in respect of the beneficial interests of that absentee beneficiary in that land; or

(b) in the case of an absentee trust that is a unit trust scheme, the value of all taxable land subject to the scheme that would be taken under section 46IC to be owned by an absentee beneficiary if a notice were in force under section 46C in respect of the unitholdings in the scheme held by that absentee beneficiary; and

(b) if the absentee trust is a discretionary trust, at the applicable rate set out in Part 5 of Schedule 1.



40


(2) The trustee is to be assessed for land tax on the whole of the land subject to the absentee trust as if the land were the only land owned by the trustee for the purposes of—

(a) the variable "B" in the formula in subsection (1)(a); and

(b) subsection (1)(b).

(3) This section does not apply to—

(a) land subject to an excluded trust; or

(b) land subject to an administration trust; or

(c) child maintenance land.

(4) This section is subject to sections 46IB, 46IC and 46IE.

46IB Land tax for absentee fixed trust if beneficial interests notified to Commissioner

(1) If a notice is in force under section 46B for a fixed trust (that is an absentee trust) and all of the beneficial interests in the land are beneficial interests of absentee beneficiaries—

(a) an absentee beneficiary of the trust is taken, for the purposes of this Act, to be the owner (but not to the exclusion of the trustee) of land subject to the trust that bears the same proportion to the whole of the land subject to the trust as the absentee beneficiary's beneficial interest in land subject to the trust bears to the total beneficial interests in land subject to the trust, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the absentee



41


beneficiary, at the applicable rate set out in Part 4 of Schedule 1; and

(b) the trustee of the trust is to be assessed for land tax on the whole of the land subject to the trust at the applicable rate set out in Part 4 of Schedule 1, as if the land were the only land owned by the trustee.

(2) There is to be deducted from the land tax payable under subsection (1)(a) by an absentee beneficiary an amount (if any) necessary to avoid double taxation, being the lesser of—

(a) the amount determined by the formula—

B A × where—

A is the proportion of the absentee beneficiary's beneficial interest in land subject to the trust to the total beneficial interests in land subject to the trust;

B is the total amount of tax assessed on the trustee under subsection (1)(b); and

(b) the amount determined by the formula—

E DC

×

where—

C is the taxable value of the land of which the absentee beneficiary is taken by subsection (1)(a) to be the owner;



42


D is the total taxable value of all taxable land owned by the absentee beneficiary;

E is the amount of tax assessed on the absentee beneficiary under subsection (1)(a).

(3) If a notice is in force under section 46B for a fixed trust (that is an absentee trust) for all of the beneficial interests in the land and at least one, but not all, of those interests is a beneficial interest of a beneficiary who is not an absentee beneficiary—

(a) a beneficiary of the trust is taken, for the purposes of this Act, to be the owner (but not to the exclusion of the trustee) of land subject to the trust that bears the same proportion to the whole of the land subject to the trust as the beneficiary's beneficial interest in land subject to the trust bears to the total beneficial interests in land subject to the trust, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the beneficiary—

(i) in the case of an absentee beneficiary, at the applicable rate set out in Part 4 of Schedule 1; and

(ii) in the case of any other beneficiary, at the applicable rate set out in Part 1 of Schedule 1; and

(b) the trustee of the trust is to be assessed for land tax on the whole of the land subject to the trust using the formula—



43


( )A B C 0·5%= + ×

where—


B is the amount determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the trust (as if that land were the only land owned by the trustee);

C is the taxable value of all land owned by an absentee beneficiary.



( ) ( )A B C 0·5%× + × where—

A is the proportion of the absentee beneficiary's beneficial interest in land subject to the trust to the total beneficial interests in land subject to the trust;

B is that part of the total amount of tax assessed on the trustee under subsection (3)(b) determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the trust (as if that land were the only land owned by the trustee);



44


C is the taxable value of the land of which the absentee beneficiary is taken by subsection (3)(a) to be the owner; and


E DC

×

where—

C is the taxable value of the land of which the absentee beneficiary is taken by subsection (3)(a) to be the owner;

D is the total taxable value of all taxable land owned by the absentee beneficiary;

E is the amount of tax assessed on the absentee beneficiary under subsection (3)(a)(i).

(5) There is to be deducted from the land tax payable under subsection (3)(a) by a beneficiary who is not an absentee beneficiary an amount (if any) necessary to avoid double taxation, being the lesser of—


B A × where—

A is the proportion of the beneficiary's beneficial interest in land subject to the trust to the total beneficial interests in land subject to the trust;



45


B is that part of the total amount of tax assessed on the trustee under subsection (3)(b) determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the trust (as if that land were the only land owned by the trustee); and


E DC

×

where—

C is the taxable value of the land of which the beneficiary is taken by subsection (3)(a) to be the owner;

D is the total taxable value of all taxable land owned by the beneficiary;

E is the amount of tax assessed on the beneficiary under subsection (3)(a)(ii).

(6) Subsection (1)(a) or (3)(a) does not apply to a beneficiary who holds a beneficial interest as trustee of another trust. Note

Under section 46ID(1)(a) such a person is taken to be the owner of land.

46IC Land tax for absentee unit trust scheme if unitholdings notified to Commissioner

(1) If a notice is in force under section 46C for all of the unitholdings in a unit trust scheme (that is an absentee trust) and all of those



46


unitholdings are held by unitholders who are absentee beneficiaries—

(a) a unitholder in the scheme is taken, for the purposes of this Act other than Division 1 of Part 4, to be the owner (but not to the exclusion of the trustee) of land subject to the scheme that bears the same proportion to the whole of the land subject to the scheme as the unitholder's unitholding in the scheme bears to the total unitholdings in the scheme, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the unitholder, at the applicable rate set out in Part 4 of Schedule 1; and

(b) the trustee of the scheme is to be assessed for land tax on the whole of the land subject to the scheme at the applicable rate set out in Part 4 of Schedule 1, as if the land were the only land owned by the trustee.



B A × where—

A is the proportion of the unitholder's unitholding in the scheme to the total unitholdings in the scheme;



47


B is the total amount of tax assessed on the trustee under subsection (1)(b); and


E DC

×

where—

C is the taxable value of the land of which the unitholder is taken by subsection (1)(a) to be the owner;

D is the total taxable value of all taxable land owned by the unitholder;

E is the amount of tax assessed on the unitholder under subsection (1)(a).

(3) If a notice is in force under section 46C for all of the unitholdings in a unit trust scheme (that is an absentee trust) and at least one, but not all, of those unitholdings is held by a unitholder who is not an absentee beneficiary—

(a) a unitholder in the scheme is taken, for the purposes of this Act other than Division 1 of Part 4, to be the owner (but not to the exclusion of the trustee) of land subject to the scheme that bears the same proportion to the whole of the land subject to the scheme as the unitholder's unitholding in the scheme bears to the total unitholdings in the scheme, and is to be assessed for land tax on that land accordingly, together



48


with any other taxable land owned by the unitholder—

(i) in the case of a unitholder who is an absentee beneficiary, at the applicable rate set out in Part 4 of Schedule 1; and

(ii) in the case of any other unitholder, at the applicable rate set out in Part 1 of Schedule 1; and

(b) the trustee of the scheme is to be assessed for land tax on the whole of the land subject to the scheme using the formula—

A B (C 0·5%)= + ×

where—


B is the amount determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the scheme (as if that land were the only land owned by the trustee);

C is the taxable value of all taxable land subject to the scheme owned by a unitholder who is an absentee beneficiary.

(4) There is to be deducted from the land tax payable under subsection (3)(a) by a unitholder who is an absentee beneficiary an amount (if any) necessary to avoid double taxation, being the lesser of—



49



( )A B (C 0·5%)× + ×

where—


B is that part of the total amount of tax assessed on the trustee under subsection (3)(b) determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the scheme (as if that land were the only land owned by the trustee);

C is the taxable value of the land of which the unitholder is taken by subsection (3)(a) to be the owner; and


E DC

×

where—





50


E is the amount of tax assessed on the unitholder under subsection (3)(a)(i).

(5) There is to be deducted from the land tax payable under subsection (3)(a) by a unitholder who is not an absentee beneficiary an amount (if any) necessary to avoid double taxation, being the lesser of—


B A × where—


B is that part of the total amount of tax assessed on the trustee under subsection (3)(b) determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the scheme (as if that land were the only land owned by the trustee); and


E DC

×

where—




51



E is the amount of tax assessed on the unitholder under subsection (3)(a)(ii).

(6) Subsection (1)(a) or (3)(a) does not apply to a unitholder who holds units as trustee of another trust. Note

Under section 46ID(1)(b) such a person is taken to be the owner of land.

46ID Land tax for beneficiary/trustees (1) For the purposes of this Act—

(a) a person who holds a beneficial interest in land subject to a fixed trust (that is an absentee trust) in respect of which a notice is in force under section 46B (the first trust) as trustee of another trust (the second trust) is taken, for the purposes of this Act, to be the owner of land subject to the first trust that bears the same proportion to the whole of the land subject to the first trust as the person's beneficial interest in the land subject to the first trust bears to the total beneficial interests in land subject to the first trust; and

(b) a person who holds units in a unit trust scheme (that is an absentee trust) in respect of which a notice is in force under section 46C (the first scheme) as trustee of another trust (the second trust) is taken, for the purposes of this Act other than Division 1 of Part 4, to be the owner of land subject to the first



52


scheme that bears the same proportion to the whole of the land subject to the first scheme as the person's unitholding in the first scheme bears to the total unitholdings in the first scheme.

(2) For the purposes of this section, a person referred to in subsection (1) is called a beneficiary/trustee.

(3) There is to be deducted from any land tax payable by a beneficiary/trustee on land that is subject to the second trust an amount (if any) necessary to avoid double taxation, being the lesser of—


( )A B (C 0·5%)× + × where—

A is—

(a) the proportion of the beneficiary/trustee's beneficial interest in land subject to the first trust to the total beneficial interests in land subject to the first trust; or

(b) the proportion of the beneficiary/trustee's unitholding in the first scheme to the total unitholdings in the first scheme;



53


B is the total amount of tax assessed on the trustee of the first trust or the first scheme on the whole of the land subject to the first trust or first scheme;

C is the taxable value of all taxable land owned by the beneficiary/trustee; and


E DC

×

where—

C is the taxable value of the land of which the beneficiary/trustee is taken by subsection (1) to be the owner;

D is the total taxable value of all taxable land owned by the beneficiary/trustee that is subject to the second trust;

E is the amount of tax assessed under this Act on the beneficiary/trustee in respect of all taxable land owned by the beneficiary/trustee that is subject to the second trust.

46IE Land tax for absentee discretionary trust with nominated beneficiary

(1) This section applies if the nomination of a nominated beneficiary for a discretionary trust that is an absentee trust is in force under section 46F.



54


(2) The nominated beneficiary is taken, for the purposes of this Act (other than Division 1 of Part 4) but for no other purpose, to be the owner of the pre-2006 land subject to the trust (but not to the exclusion of the trustee) and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the nominated beneficiary—

(a) if the nominated beneficiary is an absentee beneficiary, at the applicable rate set out in Part 4 of Schedule 1; and

(b) if the nominated beneficiary is not an absentee beneficiary, at the applicable rate set out in Part 1 of Schedule 1.

(3) The trustee of the trust is to be assessed for land tax on the whole of the land subject to the trust as if the land were the only land owned by the trustee—

(a) in respect of any pre-2006 land—at the applicable rate set out in Part 4 of Schedule 1; and

(b) in respect of any post-2006 land—at the applicable rate set out in Part 5 of Schedule 1.

(4) For the purposes of subsection (3), if the trust property includes both pre-2006 land and post-2006 land, the trustee is to be assessed in accordance with the following formula—

( ) ( )

××+

××=

TBTR

TATRL 21

where—

L is the land tax assessed for the trustee;



55


R1 is the applicable rate of land tax set out in Part 4 of Schedule 1;

R2 is the applicable rate of land tax set out in Part 5 of Schedule 1;

T is the total taxable value of all taxable land subject to the trust;

A is the total taxable value of the pre-2006 land subject to the trust;

B is the total taxable value of the post-2006 land subject to the trust.

(5) There is to be deducted from any land tax payable by the nominated beneficiary under subsection (2) any land tax payable by the trustee under subsection (3) in respect of pre-2006 land.

(6) Subsection (2) does not apply if the nominated beneficiary is the trustee.

46IF Land tax for PPR land if nominated PPR beneficiary

(1) This section applies if a nomination of a nominated PPR beneficiary for a unit trust scheme or discretionary trust that is an absentee trust is in force under section 46H.

(2) The trustee of the unit trust scheme or discretionary trust is to be assessed for land tax on land subject to the scheme or trust—

(a) if that land that is used and occupied as the principal place of residence of the nominated PPR beneficiary—

(i) as if the land were the only land owned by the trustee; and

(ii) at the applicable rate set out in Part 4 of Schedule 1; or



56


(b) if that land that is not used and occupied as the principal place of residence of the nominated PPR beneficiary, at the applicable rate set out in Part 5 of Schedule 1.

(3) Subsection (2)(a) applies only if the land has been used and occupied as the principal place of residence of the nominated PPR beneficiary—

(a) since 1 July in the year preceding the tax year in which the nomination for that PPR beneficiary is lodged under section 46H; or

(b) if the trustee became owner of the land on or after 1 July in the year preceding the tax year in which the nomination for that PPR beneficiary is lodged under section 46H, since a later date during that year.

(4) Subsection (2)(a) does not apply if the land for which a nomination is in force is used to carry on a substantial business activity.

(5) In determining whether land is used by a person to carry on a substantial business activity, account must be taken of the factors referred to in section 62(2).".

33 New Division heading inserted into Part 3 Before section 46J of the Land Tax Act 2005 insert—

"Division 2AC—Miscellaneous trust land provisions".



57


34 Trustee's right of reimbursement In section 46J of the Land Tax Act 2005, after "trust" (where secondly occurring) insert "under Division 2A or 2AB".

35 New Division 3A of Part 3 inserted After Division 3 of Part 3 of the Land Tax Act 2005 insert—

"Division 3A—Land held by related absentee corporations

50A Land tax surcharge for related absentee corporations

(1) This section applies if—

(a) for the purposes of this Act, the Commissioner has treated related corporations as a single corporation; and Note

See section 50.

(b) at least one of those related corporations is an absentee owner that is an absentee corporation.

(2) Each of the related corporations is jointly and severally liable for land tax on the land all of the corporations own determined using the following formula—

A B (C 0·5%)= + ×

where—




58


B is the amount determined by applying the applicable rate set out in Part 1 of Schedule 1 on the taxable value of all of the land owned by the corporations;

C is the taxable value of all of the land owned by the absentee corporations.".

36 Consequential repeal of definition of specified beneficiary

In section 64(1) of the Land Tax Act 2005, the definition of specified beneficiary is repealed.

37 New section 104B inserted After section 104A of the Land Tax Act 2005 insert—

"104B Notification of absentee owner status (1) A person who is an absentee owner on

31 December every year must lodge a written notice with the Commissioner before 15 January in the following year.

(2) A person who ceases to be an absentee owner in the 2016 tax year, or any tax year after the 2016 tax year, must lodge a written notice with the Commissioner before 15 January in the year after the 2016 year or the relevant tax year.

(3) A notice under this section must be in the form, contain the information and be accompanied by any documents or other evidence determined by the Commissioner.".

38 New Parts 4 and 5 of Schedule 1 inserted After Part 3 of Schedule 1 to the Land Tax Act 2005 insert—

"Part 4—General absentee owner surcharge rates of land tax



59


4.1 Rate of land tax on land held by absentee owners The rate of land tax on land held by an absentee owner for 2016 and each subsequent year is set out in Table 4.1.

TABLE 4.1

Item

Column 1 Taxable

value not less than

Column 2 Taxable

value less than

Column 3 Rate of land tax

$ $

1 0 250 000 Nil

2 250 000 600 000 $1525 and 0⋅7% of the taxable value that exceeds $250 000

3 600 000 1 000 000 $3975 and 1⋅0% of the taxable value that exceeds $600 000

4 1 000 000 1 800 000 $7975 and 1⋅3% of the taxable value that exceeds $1 000 000

5 1 800 000 3 000 000 $18 375 and 1⋅8% of the taxable value that exceeds $1 800 000

6 3 000 000 $39 975 and 2⋅75% of the taxable value that exceeds $3 000 000

Part 5—Surcharge rates of land tax for absentee trusts

5.1 Rate of land tax on land held by owner subject to an absentee trust The rate of land tax for land held by an owner subject to an absentee trust for 2016 and each subsequent year is set out in Table 5.1.



60


TABLE 5.1

Item

Column 1 Taxable

value not less than

Column 2 Taxable

value less than

Column 3 Rate of land tax

$ $

1 0 25 000 Nil



4 600 000 1 000 000 $5938 and 1⋅375% of the taxable value that exceeds $600 000



7 3 000 000 $39 975 and 2⋅75% of the taxable value that exceeds $3 000 000

".

Part 4—Amendment of Taxation Administration Act 1997


61



Division 1—Refunds and offsets 39 Section 20 substituted and new section 20A inserted

For section 20 of the Taxation Administration Act 1997 substitute—

"20 When must Commissioner make a refund? Subject to section 20A, the Commissioner must refund an overpaid amount if—

(a) the taxpayer has lodged an application for a refund with the Commissioner in accordance with section 19; and

(b) the Commissioner finds that an amount has been overpaid by the taxpayer.

20A Offset of refund against other liability (1) Instead of making a refund to a taxpayer, the

Commissioner may apply the overpaid amount—

(a) against any liability of the taxpayer to the State arising under, or by reason of, a taxation law or another Act of which the Commissioner has the general administration; or

(b) against any future liability of the taxpayer to the State arising under, or by reason of, a taxation law.

(2) Despite subsection (1), the Commissioner must not apply an overpaid amount towards a future liability unless—

(a) the taxpayer consents in writing; and



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(b) the future liability arises within 60 days after the day on which refund becomes payable.

(3) If the taxpayer withdraws consent, the Commissioner must refund the taxpayer the overpaid amount.

(4) The Commissioner must refund the taxpayer any part of an overpaid amount that is not applied under subsection (1).

(5) This section does not apply in respect of a refund of a contribution paid under Part 9B of the Planning and Environment Act 1987.".

40 Refund of amount After section 115(3) of the Taxation Administration Act 1997 insert—

"(4) Section 20A applies in respect of a refund under this section as if it were a refund under section 20.".

41 Section 116 substituted For section 116 of the Taxation Administration Act 1997 substitute—

"116 Interest and successful objection, review or appeal

(1) In addition to an amount refunded under this Part, the Commissioner must pay interest on that amount in relation to the period starting on the date the taxpayer paid the overpaid amount or the date the Commissioner made the assessment to which the objection and review or appeal relates (whichever is the later date) and ending on the date of the refund.



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(2) Subject to subsection (4), in addition to an amount applied to a taxpayer's existing liability under this Part, the Commissioner must pay interest on that amount in relation to the period starting on the date the taxpayer paid the overpaid amount or the date the Commissioner made the assessment to which the objection and review or appeal relates (whichever is the later date) and ending on the date the Commissioner applies the amount.

(3) Subject to subsection (5), in addition to an amount applied to a taxpayer's future liability under this Part, the Commissioner must pay interest on that amount in relation to the period starting on the date the taxpayer paid the overpaid amount or the date the Commissioner made the assessment to which the objection and review or appeal relates (whichever is the later date) and ending on the date the future liability arises.

(4) Instead of paying interest under subsection (2), the Commissioner may apply that interest against the taxpayer's liability referred to in that subsection.

(5) Instead of paying interest under subsection (3), the Commissioner may apply that interest against the taxpayer's future liability referred to in that subsection if the taxpayer has given consent under section 20A(2).

(6) The Commissioner must pay the taxpayer any amount of interest referred to in subsection (2) or (3) that is not applied under this section.

(7) The Commissioner must pay interest under this section on a daily basis calculated at the market rate referred to in section 25(1)(a).".



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42 Schedule 1 amended After clause 17 of Schedule 1 to the Taxation Administration Act 1997 insert—

"18 Applications for refunds Part 4, as in force immediately before the day on which Division 1 of Part 4 of the State Taxation Acts Amendment Act 2015 comes into operation, continues to apply on and after that day to an application made under section 19 before that day.

19 Refunds following objections etc. (1) This clause applies if—

(a) before the commencement day, a taxpayer lodges an objection under section 96; and

(b) on or after that day, the Commissioner is required to refund an amount under section 115 in respect of the objection or any review or appeal of the determination of the objection.

(2) Division 3 of Part 10, as in force immediately before that day, continues to apply on and after that day to the amount.

(3) In this clause—

commencement day means the day on which Division 1 of Part 4 of the State Taxation Acts Amendment Act 2015 came into operation.".



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43 Consequential amendment—Back to Work Act 2015 For section 56 of the Back to Work Act 2015 substitute—

'56 Offset of refund against other liability After section 20A(5) of the Taxation Administration Act 1997 insert—

"(6) This section does not apply in respect of a liability arising under the Back to Work Act 2015.".'.

Division 2—Absentee owner land tax surcharge 44 Definitions

In section 3(1) of the Taxation Administration Act 1997, in the definition of notification default—

(a) in paragraph (b), for "2005;" substitute "2005; or"; and

(b) after paragraph (b) insert—

"(c) a failure to give a notice to the Commissioner in accordance with section 104B of the Land Tax Act 2005;".

45 Amount of penalty tax In section 30(2A) of the Taxation Administration Act 1997, for "or 104A" substitute ", 104A or 104B".

Part 5—Repeal of amending Act


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Part 5—Repeal of amending Act 46 Repeal of amending Act

This Act is repealed on 1 July 2016. Note

The repeal of this Act does not affect the continuing operation of the amendments made by it (see section 15(1) of the Interpretation of Legislation Act 1984).

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Endnotes


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Endnotes 1 General information

See www.legislation.vic.gov.au for Victorian Bills, Acts and current authorised versions of legislation and up-to-date legislative information. † Minister's second reading speech—

Legislative Assembly: 7 May 2015

Legislative Council: 28 May 2015

The long title for the Bill for this Act was "A Bill for an Act to amend the Duties Act 2000, the Land Tax Act 2005 and the Taxation Administration Act 1997 and to consequentially amend the Back to Work Act 2015 and for other purposes."

State Taxation Acts Amendment Act 2015...Part 2—Amendment of Duties Act 2000 State Taxation Acts...

Documents

Transcript of State Taxation Acts Amendment Act 2015...Part 2—Amendment of Duties Act 2000 State Taxation Acts...