Untitled document

State Taxation Acts (Tax Reform) Act 2004

Act No. 46/2004

table of provisions

Section  Page

Part 1—Preliminary

1.Purposes

2.Commencement

Part 2—Duties Act 2000

3.Definitions

4.Land use entitlements

5.Value of dutiable property—pre-existing equitable interests

6.New sections 22A and 22B inserted

22A.Tenant's fixtures to be included in the value of land

22B.Interdependent sale of land and business goods

7.New section 50A inserted

50A.Conversion of land use entitlements to different form
of title

8.Eligible pensioner exemptions and concessions

9.New section 60A inserted

60A.Election to receive eligible pensioner exemption/concession or additional first home owner grant

10.New section 63A inserted

63A.Temporary suspension of first home owner exemption
or concession

11.New Part 6 of Chapter 2 inserted

Part 6—tax Avoidance Schemes

69A.Imposition of duty

69B.What is a tax avoidance scheme?

69C.Anti-avoidance provision

69D.Misleading information

12.New Parts 1 and 2 of Chapter 3 substituted

Part 1—Introduction and Overview

70.Imposition of duty

Part 2—Acquisition of Interests in Certain Landholders

Division 1—Landholders

71.Meaning of "landholder"

72.What are "land holdings"?

73.Effect of uncompleted agreements

74.Constructive ownership of land holdings and other property: linked entities

75.Constructive ownership of land holdings and other property: discretionary trusts

Division 2—Acquisitions of Interests in Landholders

76.What are "interests" and "significant interests" in landholders?

77.How may an interest be "acquired"?

Division 3—Charging of Duty

78.When does a liability for duty arise?

79.What is a "relevant acquisition"?

80.Acquisition statements

81.When must duty be paid?

82.Who is liable to pay the duty?

83.How duty is charged on relevant acquisitions

84.Phasing-in of duty

Division 4—Exemptions, Concessions and Supplemental Provisions

85.Exemptions

86.Maximisation of entitlements on distribution of
property

87.Valuation of property

88.Agreements for sale, transfer or purchase of land and other property

89.Duty concession acquisitions securing financial accommodation

89A.Re-purchase facilities—widely held trusts

89B.Disqualifying circumstances for certain unit trust schemes

89C.Sale of private unit trust scheme through conversion to public unit trust scheme

Division 5—Conversion of Public Unit Trust Schemes to Private Unit Trust Schemes

89D.Interpretation and application of Division

89E.When public unit trust scheme becomes a private unit trust scheme

89F.Interstate security duty

Division 6—Tax Avoidance Schemes

89G.Imposition of duty

89H.What is a tax avoidance scheme?

89I.Anti-avoidance provision

89J.Misleading information

Division 7—Registration of Unit Trust Schemes

89K.Definitions

89L.Application for registration

89M.Registration of imminent public unit trust schemes

89N.Registration of declared public unit trust schemes

89O.Registration of wholesale unit trust schemes

89P.Registration of imminent wholesale unit trust schemes

89Q.Duration of registration

89R.Reporting requirements

89S.Cancellation of registration

13.New Part 5 inserted in Chapter 3

Part 5—Acquisition of Land Use Entitlements by Allotment of Shares or Issue of Units

103A.When does a liability for duty arise?

103B.When must duty be paid?

103C.Who is liable to pay the duty?

103D.Acquisition of land use entitlement

103E.Form of statement

103F.Assessment of duty

14.Consequential amendment

15.New section 273 substituted

273.Valuation of property

16.Transitional provisions

20.State Taxation Acts (Tax Reform) Act 2004

17.Further transitional provisions

Part 3—First Home Owner Grant Act 2000

18.Additional grant

19.New sections 46A and 46B inserted

46A.Temporary grant for certain home owners who are not otherwise eligible for grant

46B.Commissioner may require information

Part 4—Land Tax Act 1958

20.New section 7A substituted

7A.Minimum assessment

21.Revised land tax rates and thresholds

Part 5—Pay-roll Tax Act 1971

22.Definitions

23.Repeal of existing employment agent provisions

24.New Part II inserted

Part II—Employment Agents

4.Interpretation

5.Employment agents deemed to be employers of service providers

5A.Agreement to reduce or avoid liability to pay-roll tax

25.Exemption for group training scheme wages

Part 6—Taxation Administration Act 1997

26.Objections concerning the valuation of property

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Endnotes

State Taxation Acts (Tax Reform) Act 2004

[Assented to 16 June 2004]

The Parliament of Victoria enacts as follows:

Part 1Preliminary—

1.Purposes

The purposes of this Act are—

(a)to amend the Duties Act 2000—

(i)to provide an increase in thresholds for eligible pensioner exemptions and concessions;

(ii)to introduce general anti-avoidance provisions;

(iii)to reform the taxation of acquisitions of interests in land-rich entities;

(iv)to extend the valuation provisions;

(b)to amend the First Home Owner Grant Act 2000 to increase the amount of the grant in certain circumstances;

(c)to amend the Land Tax Act 1958 to revise the rates of tax and tax thresholds;

(d)to amend the Pay-roll Tax Act 1971 with respect to employment agent contracts;

(e)to amend the Taxation Administration Act 1997 regarding the valuation of property.

2.Commencement

(1)This Act (except Part 3, Part 5 and sections 3, 8, 9, 10, 12, 16 and 17) comes into operation on the day after the day on which it receives the Royal Assent.

(2)Part 3 and sections 8, 9, 10 and 16 are deemed to have come into operation on 1 May 2004.

(3)Sections 3, 12 and 17 are deemed to have come into operation on 13 May 2004.

(4)Part 5 comes into operation on 1 January 2005.

__________________

Part 2Duties Act 2000—

3.Definitions

(1)In section 3(1) of the Duties Act 2000, in the definition of "associated person"—

(a)for paragraph (c) substitute—

'(c)companies are associated persons if—

(i)there are minority shareholders common to each company who, if their interests were aggregated, would be majority shareholders in each company; or

(ii)any majority shareholder or relative is a majority shareholder in each company;

(ca)companies are associated persons if the shares in the companies are "stapled", in that they are unable to be traded other than as if they together represented a single security;';

(b)in paragraph (d), after "unit trust" insert "scheme";

(c)for paragraph (e) substitute—

'(e)a company and a trustee are associated persons if the company or a related body corporate of the company is a beneficiary of the trust (not including a public unit trust scheme) of which the trustee is a trustee;

(f)a company and the trustee of a unit trust scheme are associated persons if their shares and units are "stapled", in that they are unable to be traded other than as if they together represented a single security;

(g)trustees of unit trust schemes are associated persons if the units in each of the unit trust schemes are "stapled", in that they are unable to be traded other than as if they together represented a single security;

(h)a qualified investor and a private company are associated persons if the qualified investor is a majority shareholder in the private company;

(i)a qualified investor and the trustee of a private unit trust scheme are associated persons if the qualified investor holds 20% or more of the units in the private unit trust scheme;';

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

(a)after the definition of "interest" insert—

' "interest" in a landholder has the meaning given by section 76(1);';

(b)insert the following definitions—

' "land use entitlement" means an entitlement to occupy land in Victoria conferred through an ownership of shares in a company or units in a unit trust scheme, or a combination of a shareholding or ownership of units together with a lease or licence;

"linked entity" has the meaning given in section 74;

"listed trust" means a unit trust scheme all of the units in which are listed for quotation on the Australian Stock Exchange or any exchange of the World Federation of Exchanges, and are traded on that exchange;

"majority shareholder" in a company means—

(a)in the case of a company the shares in which are not divided into classes—a person entitled to not less than 50% of those shares; and

(b)in the case of a company the shares in which are divided into classes—a person entitled to not less than 50% of the shares in any of those classes;

"minority shareholder" in a company, means a shareholder in that company who is not a majority shareholder;

"qualified investor" has the meaning given in section 89K;

"registered declared public unit trust scheme" means a unit trust scheme declared as a public unit trust scheme under Division 7 of Part 2 of Chapter 3;

"registered imminent public unit trust scheme" means a unit trust scheme that is registered as an imminent public unit trust scheme under Division 7 of Part 2 of Chapter 3;

"trustee" of a unit trust scheme that is a managed investment scheme, includes—

(a)a responsible entity of the scheme; and

(b)an agent appointed, or other person engaged, by a responsible entity of the scheme under Part 5C.2 of the Corporations Act;

"wholesale unit trust scheme" means a unit trust scheme that is registered under Division 7 of Part 2 of Chapter 3 as a wholesale unit trust scheme or an imminent wholesale unit trust scheme;

"widely held trust" means a unit trust scheme—

(a)that is a managed investment scheme registered under Part 5C.1 of the Corporations Act; and

(b)in which units have been issued to the public; and

(c)that has not less than 300 public unit holders—

(i)each of whom is beneficially entitled to the units and holds at least the minimum subscription under the prospectus or product disclosure statement; and

(ii)none of whom, individually or together with any associated person, is beneficially entitled to more than 20% of the units in the scheme.';

(c)in the definition of "managed investment scheme" omit ", and includes a public unit trust scheme";

(d)in the definition of "private company", for "a recognised stock exchange" substitute "any exchange of the World Federation of Exchanges";

(e)the definition of "private corporation" is repealed;

(f)for the definition of "private unit trust scheme" substitute—

' "private unit trust scheme" means a unit trust scheme that is not—

(a)a public unit trust scheme; or

(b)a wholesale unit trust scheme;';

(g)for the definition of "public unit trust scheme" substitute—

' "public unit trust scheme" means any of the following unit trust schemes—

(a)a listed trust;

(b)a widely held trust;

(c)a registered imminent public unit trust scheme;

(d)a registered declared public unit trust scheme—

but does not include a unit trust scheme that is, or was at any time, a wholesale unit trust scheme or eligible for registration as such;';

(h)in the definition of "recognised stock exchange", in paragraph (a), for "Fédération Internationale des Bourses de Valeurs" substitute "World Federation of Exchanges";

(i)in the definition of "related person"—

(i)in paragraphs (b) and (c) omit "private" (wherever occurring);

(ii)in paragraph (d), for "public unit trust" substitute "public unit trust scheme";

(iii)in paragraph (e), omit "private";

(iv)in paragraph (e), for "public unit trust" substitute "public unit trust scheme";

(v)paragraph (f) is repealed;

(j)in the definition of "Victorian company", in paragraph (b), for "Act." substitute "Act;".

(3)In section 3(1) of the Duties Act 2000, in the definition of "unit"—

(a)in paragraph (b), for "interest;" substitute "interest—";

(b)after paragraph (b) insert—

'and, for the purposes of the definitions of "listed trust" and "widely held trust" and Part 2 of Chapter 3, means a unit (within the meaning of paragraph (a) or (b)) that entitles the beneficiary to participate proportionately with other unit holders in a distribution of the property of the trust on its vesting;'.

4.Land use entitlements

In section 10(1) of the Duties Act 2000—

(a)in paragraph (a), after "following estates" insert "or interests";

(b)after paragraph (a)(iv) insert—

"(v)a land use entitlement;";

(c)in paragraphs (d) and (f), after "estate" (wherever occurring) insert "or interest".

5.Value of dutiable property—pre-existing equitable interests

After section 22(2) of the Duties Act 2000 insert—

"(2A)A reference in sub-section (2) to an interest includes a reference to an equitable interest that—

(a)was created before the time of the transfer of the land or goods; and

(b)is in existence at that time.".

6.New sections 22A and 22B inserted

After section 22 of the Duties Act 2000 insert—

'22A.Tenant's fixtures to be included in the value of land

(1)In determining for the purposes of this Part the unencumbered value of land, the value of any tenant's fixtures on that land is to be included in that value.

(2)However, the value of tenant's fixtures is not to be included if the Commissioner is satisfied that the fixtures are not sold or transferred to the purchaser, the transferee of the land or an associated person of the purchaser or the transferee of the land.

(3)In this section—

"tenant's fixtures", in relation to land, means fixtures on that land that, under section 28 of the Landlord and Tenant Act 1958, are the property of a tenant.

22B.Interdependent sale of land and business goods

(1)This section applies if—

(a)an estate or interest in land referred to in section 10(1)(a) is transferred to a person ("the land transferee") under a contract of sale of land; and

(b)business goods relating to that land are sold to another person ("the goods transferee") under a contract of sale of goods, or a contract of sale of a business; and

(c)the land transferee and the goods transferee are not associated persons; and

(d)the Commissioner is satisfied that the contract of sale referred to in paragraph (a) and the contract of sale referred to in paragraph (b) are not substantially one transaction; and

(e)at least one of the contracts of sale referred to in paragraph (a) and (b) is conditional on the other.

(2)If this section applies—

(a)in determining the unencumbered value of the land transferred to the land transferee, the value of the business goods is to be disregarded;

(b)nothing in section 24 applies to the transfer.

(3)However, if at any subsequent time the business goods or any of them are transferred to the land transferee or to an associated person of the land transferee, the value of the business goods transferred is deemed to have formed part of the value of the land and duty payable under this Part is to be assessed or reassessed on that basis.

(4)Any duty payable because of the operation of sub-section (3) is payable within 3 months after the date on which the business goods were transferred to the land transferee.

(5)Sub-section (3) does not apply if the Commissioner is satisfied that—

(a)the land transferee acquired the business goods at least 3 years after acquiring the land; and

(b)the acquisition of the business goods by the land transferee at a subsequent time was not contemplated at the time of the contract of sale of the land.

(6)In this section—

"business goods" means goods used in connection with a business carried on or in connection with land, other than goods referred to in section 10(1)(d)(i), (ii), (iii) or (iv).'.

7.New section 50A inserted

After section 50 of the Duties Act 2000 insert—

"50A.Conversion of land use entitlements to different form of title

No duty is chargeable under this Chapter in respect of the transfer of an estate in fee simple in a lot on a registered plan of subdivision within the meaning of the Subdivision Act 1988 if—

(a)the transferee, immediately before registration of the plan, held a land use entitlement in respect of the land or part of the land the subject of the plan; and

(b)the transfer is part of an arrangement under which the transferee will take an interest in the lot similar in effect to, and in substitution for, the interest the transferee held under the land use entitlement immediately before the registration of the plan; and

(c)either of the following applies—

(i)ad valorem duty was paid at the time the land use entitlement was acquired by the transferee; or

(ii)no duty was chargeable on the acquisition of the land use entitlement because of section 34, 36, 42 or 44.".

8.Eligible pensioner exemptions and concessions

(1)For section 59(1) of the Duties Act 2000 substitute—

"(1)An eligible pensioner is entitled to an exemption from duty under this Chapter in respect of a transfer to him or her of dutiable property, being an estate in fee simple in land, if—

(a)at the time of the transfer there is a dwelling on the land; and

(b)the dutiable value of the dutiable property does not exceed $250 000.".

(2)In section 59 of the Duties Act 2000—

(a)in sub-section (2)(b), for "150 000 but does not exceed $200 000" substitute "250 000 but does not exceed $350 000";

(b)in sub-section (3), for the formula substitute—

".

(3)For section 60(1) of the Duties Act 2000 substitute—

"(1)An eligible pensioner is entitled to an exemption from duty under this Chapter in respect of a transfer to him or her of dutiable property, being an estate in fee simple in land, if—

(a)at the time of the transfer there is not a dwelling on the land; and

(b)a dwelling is constructed on the land within 3 years after that time; and

(c)the aggregate of the dutiable value of the dutiable property and the cost of the construction of the dwelling does not exceed $250 000.".

(4)In section 60 of the Duties Act 2000—

(a)in sub-section (2)(c), for "150 000 but does not exceed $200 000" substitute "250 000 but does not exceed $350 000";

(b)in sub-section (3), for the formula substitute—

9.New section 60A inserted

After section 60 of the Duties Act 2000 insert—

"60A.Election to receive eligible pensioner exemption/concession or additional first home owner grant

(1)This section applies to an eligible pensioner who, but for this section or section 18(3) of the First Home Owner Grant Act 2000, would be entitled—

(a)to an exemption or concession from duty under section 59 or 60 in respect of a transfer of an estate in fee simple in land; and

(b)to receive an amount under section 18(2) of the First Home Owner Grant Act 2000 in respect of an eligible transaction (within the meaning of that Act) relating to that land.

(2)The eligible pensioner, by notice in writing to the Commissioner, must elect to receive—

(a)the exemption or concession under section 59 or 60 (as the case requires) in respect of the transfer; or

(b)the amount under section 18(2) of the First Home Owner Grant Act 2000 in respect of the eligible transaction.

(3)If the eligible pensioner elects to receive the amount under section 18(2) of the First Home Owner Grant Act 2000, or does not make an election under this section, he or she is not entitled to the exemption or concession under section 59 or 60 (as the case requires) in respect of the transfer.

(4)Despite sub-section (3), if an eligible pensioner would, but for that sub-section, be entitled to an exemption or concession under section 59 or 60, section 167 applies to the home owner as if he or she were so entitled.".

10.New section 63A inserted

After section 63 of the Duties Act 2000 insert—

"63A.Temporary suspension of first home owner exemption or concession

(1)Nothing in this Division applies to a transfer to an eligible first home owner of an estate in fee simple in land if the contract for the commencement date of the eligible transaction is made on or after 1 May 2004 and before 1 July 2005.

(2)Despite sub-section (1), if an eligible first home owner referred to in that sub-section would, but for that sub-section, be entitled to an exemption or concession under this Division, section 167 applies to the home owner as if he or she were so entitled.".

11.New Part 6 of Chapter 2 inserted

After Part 5 of Chapter 2 of the Duties Act 2000 insert—

'Part 6tax Avoidance Schemes—

69A.Imposition of duty

(1)This Part imposes duty on a transaction in respect of which duty would have been chargeable under this Chapter but for a tax avoidance scheme.

(2)Duty is payable at the time it would have been payable but for the tax avoidance scheme.

69B.What is a tax avoidance scheme?

(1)For the purposes of this Part, a "tax avoidance scheme" is a scheme that directly or indirectly—

(a)has tax avoidance as its purpose or effect; or

(b)has tax avoidance as one of its purposes or effects, if the purpose or effect of tax avoidance is not merely incidental to another purpose or effect of the scheme—

whether the scheme had that effect at the time that it was entered into, or only subsequently.

(2)In this section—

"scheme" includes the whole or any part of—

(a)a contract, agreement, arrangement, understanding, promise or undertaking (including all steps and transactions by which it is carried into effect)—

(i)whether made or entered into orally or in writing;

(ii)whether express or implied;

(iii)whether or not enforceable;

(b)a plan, proposal, action, course of action or course of conduct, whether or not unilateral;

(c)a trust;

"tax avoidance" means—

(a)an elimination or reduction in the liability of a person for duty under this Chapter;

(b)a postponement in the liability of a person to pay duty under this Chapter.

69C.Anti-avoidance provision

(1)If the Commissioner considers that a person has participated in a tax avoidance scheme, the Commissioner may—

(a)disregard the scheme; and

(b)determine what duty would have been payable under this Chapter but for the scheme; and

(c)make an assessment or reassessment under the Taxation Administration Act 1997 of the tax liability of the person or any other person to give effect to that determination.

(2)A tax default occurs for the purposes of the Taxation Administration Act 1997 if the whole of any duty assessed or reassessed in accordance with sub-section (1)(c) is not paid to the Commissioner within 3 months after liability for the duty arose.

69D.Misleading information

(1)This section applies to a person who is employed or concerned in—

(a)the preparation of an instrument that effects or evidences a dutiable transaction; or

(b)the provision of any advice regarding the form of a dutiable transaction.

(2)The person must not omit from, or fail to include in, the instrument or in any material presented to the Commissioner any fact or circumstance affecting the liability of any person for duty under this Chapter.

Penalty:10 penalty units.'.

12.New Parts 1 and 2 of Chapter 3 substituted

For Parts 1 and 2 of Chapter 3 of the Duties Act 2000 substitute—

'Part 1—Introduction and Overview

70.Imposition of duty

This Chapter charges duty at the same rate as for a transfer of dutiable property under Chapter 2 on certain transactions which are not dutiable transactions under Chapter 2.

Note:Duty is chargeable under Part 2 on the acquisition by a person of certain interests in—

·   a private unit trust scheme; or

·   a wholesale unit trust scheme; or

·   a private company—

that has land holdings in Victoria with an unencumbered value of $1 million or more and the land holdings in all places of which comprise 60% or more of the unencumbered value of all its property.

The duty is chargeable at the general rate for a dutiable transaction under Chapter 2.

Duty was chargeable under Parts 3 and 4 on certain transactions occurring before 1 July 2002.

__________________

Part 2—Acquisition of Interests in Certain Landholders

Division 1Landholders—

71.Meaning of "landholder"

(1)For the purposes of this Part, a "landholder" is any of the following that has land holdings in Victoria—

(a)a private unit trust scheme;

(b)a wholesale unit trust scheme;

(c)a private company.

(2)A landholder is "land rich" if—

(a)it has land holdings in Victoria with an unencumbered value of $1 000 000 or more; and

(b)its land holdings in all places, whether within or outside Australia, comprise 60% or more of the unencumbered value of all its property.

Note:As to what constitutes a land holding, see section 72.  As to ownership through linked entities or discretionary trusts, see sections 74 and 75.

(3)In calculating the unencumbered value of the property of a landholder for the purposes of sub-section (2), property of any of the following kinds is not counted—

(a)cash, whether in Australian or other currency;

(b)money in an account at call or money on deposit with any person, negotiable instruments or debt securities;

(c)loans that, according to their terms, are to be repaid on demand by the lender or within 12 months after the date of the loan;

(d)if the landholder is a unit trust scheme, loans to beneficiaries of the scheme or to persons who, in relation to any trustee or beneficiary of the scheme, are associated persons;

(e)if the landholder is a private company, loans to shareholders of the company or to persons who, in relation to the company or to a shareholder or director of the company, are associated persons;

(f)land use entitlements;

(g)property consisting of units, shares or any other interest in a linked entity (other than in a linked entity whose property is not counted because of section 74(5));

(h)the deposit and amount due under an agreement referred to in section 73;

(i)prescribed property, unless the Commissioner, being satisfied that the property concerned was not acquired solely or mainly for the purpose of avoiding duty under this Part, notifies the landholder that the property will be counted for the purposes of such a calculation.

Note:"Associated person" and "land use entitlement" are defined in section 3.

(4)In addition to sub-section (3), property is not to be counted in calculating the unencumbered value of all the property of a landholder for the purposes of sub-section (2) if the landholder is unable to satisfy the Commissioner that the property was obtained otherwise than to reduce, for the purposes of this Part, the ratio of its land holdings in all places, whether within or outside Australia, to the unencumbered value of all its property.

(5)In determining whether or not a landholder is land rich for the purposes of an acquisition of an interest in the landholder by a person from a lineal ancestor or lineal descendant, the land holdings of the landholder are taken, for the purposes of sub-section (2)(b) not to include land held by the landholder that is primarily used for primary production.

72.What are "land holdings"?

(1)For the purposes of this Part, a "land holding" is an interest in land other than the estate or interest of a mortgagee, chargee or other secured creditor or a profit à prendre.

(2)An interest in land, however—

(a)is not a land holding of a unit trust scheme unless the interest is held by a trustee of the scheme in the capacity of trustee; and

(b)is not a land holding of a private company unless the interest of the private company in the land is a beneficial interest.

(3)This section is in aid of, but does not limit, the operation of any provision of this Part providing for constructive ownership of interests in land.

73.Effect of uncompleted agreements

(1)For the purposes of this Part, the transferor and the transferee under an uncompleted agreement for the transfer of land are taken to be separately entitled to the whole of the land.

(2)For the purposes of this Part—

(a)if there is an uncompleted agreement for the disposal of property other than land, the agreement is taken to have been completed; and

(b)if there is an uncompleted agreement for the acquisition of property other than land, the agreement is to be disregarded.

Note:A refund may be payable in relation to the completion or rescission of an agreement referred to in this section—see section 88.

74.Constructive ownership of land holdings and other property: linked entities

(1)For the purposes of this Part, a landholder holds land or other property if the landholder is entitled to it through a linked entity.

(2)Land or other property held because of sub-section (1) is in addition to any land or other property that the landholder holds in its own right.

(3)The interest the landholder holds in land or other property referred to in sub-section (1) is the proportion of the land or other property that the landholder would be entitled to receive if all linked entities were to be wound up as provided in sub-section (4).

(4)A landholder is entitled to land or other property through linked entities, whether linked to the landholder or to other entities linked to the landholder or to each other, if, on the winding up of all linked entities and without having regard to any liabilities of the linked entities, the landholder would receive an interest in the land or other property held by any of the linked entities.

(5)However, land or other property of linked entities is not counted for the purposes of this Part unless at least 20% of it is received by the landholder ultimately from linked entities as provided by sub-section (4).

(6)The value, for duty purposes, of the interest in land or other property that a landholder holds through a linked entity because of sub-section (1) is that portion of the unencumbered value of the land or other property to which the landholder would be entitled (without regard to any liabilities of the linked entities) if each linked entity were to be wound up.

(7)In this section—

"linked entity" means any person or body, corporate or unincorporated, that may hold property in its own right or for the benefit of any person, and includes a trust but does not include—

(a)a natural person; or

(b)a public unit trust scheme or a company whose shares are listed on the Australian Stock Exchange or an exchange of the World Federation of Exchanges;

"winding up" of a linked entity includes any means by which the entity's property is divested in favour of the persons entitled to it and, in the case of a linked entity that is a trust, includes the vesting of the trust property in the beneficiaries.

75.Constructive ownership of land holdings and other property: discretionary trusts

(1)A person or a member of a class of persons in whose favour, by the terms of a discretionary trust, capital the subject of the trust may be applied—

(a)in the event of the exercise of a power or discretion in favour of the person or class; or

(b)in the event that a discretion conferred under the trust is not exercised—

is, for the purposes of this section, a "beneficiary" of the trust.

(2)A beneficiary of a discretionary trust is taken to own or to be otherwise entitled to the property the subject of the trust, except to the extent (if any) determined by the Commissioner.

(3)For the purposes of this Part, any property that is the subject of a discretionary trust is taken to be the subject of any other discretionary trust—

(a)that is; or

(b)any trustee of which (in the capacity of trustee) is—

a beneficiary of it.

(4)Sub-section (3) extends to apply to property that is the subject of a discretionary trust only by the operation of that sub-section.

(5)Nothing in this section applies so that a person is taken to own or be entitled to more than 100% of the property the subject of a trust.

(6)In this section—

"person" includes a landholder and a linked entity;

"property" includes land.

Note:"Discretionary trust" is defined in section 3.

Division 2—Acquisitions of Interests in Landholders

76.What are "interests" and "significant interests" in landholders?

(1)A person has an "interest" in a landholder if the person has a beneficial entitlement (otherwise than as a creditor or other person to whom the landholder is liable), whether directly or through another person, to a distribution of property from the landholder on a winding up of the landholder or otherwise.

(2)A person who, by virtue of sub-section (1), has an interest in a landholder has a "significant interest" in the landholder if the person, in the event of a distribution of all the property of the landholder immediately after the interest was acquired, would be entitled to—

(a)in the case of a private unit trust scheme—20% or more of the property distributed; or

(b)in the case of a landholder other than a private unit trust scheme—50% or more of the property distributed.

(3)In this section—

"person" includes a landholder;

"winding up" of a landholder that is a unit trust scheme means the vesting of the trust property in the beneficiaries.

Note:Section 86 is relevant to ascertaining a person's entitlements on a distribution of property.

77.How may an interest be "acquired"?

(1)A person acquires an interest in a land rich landholder if the person obtains an interest beneficially, including if the person's interest increases, in the landholder regardless of how it is obtained or increased.

(2)Without limiting sub-section (1), a person may acquire an interest in a land rich landholder in the following ways—

(a)the purchase, gift, allotment or issue of a unit or share;

(b)the cancellation, redemption or surrender of a unit or share;

(c)the abrogation or alteration of a right pertaining to a unit or share;

(d)the payment of an amount owing for a unit or share.

(3)To remove any doubt, it is declared that an acquisition by way of transfer of units or shares is not necessary to acquire an interest in a land rich landholder.

Division 3—Charging of Duty

78.When does a liability for duty arise?

A liability for duty charged by this Part arises when a relevant acquisition is made.

79.What is a "relevant acquisition"?

(1)For the purposes of this Part, a person makes a relevant acquisition if—

(a)the person acquires an interest in a land rich landholder—

(i)that is of itself a significant interest in the landholder; or

(ii)that, when aggregated with other interests in the landholder acquired by the person or an associated person of the person (or both) on the same day or within the 3 years preceding the acquisition of the interest, results in an aggregation that amounts to a significant interest in the landholder; or

(iii)that, when aggregated with other interests in the landholder acquired by the person or interests acquired by any person in an associated transaction (or both) on the same day or within the 3 years preceding the acquisition of the interest, results in an aggregation that amounts to a significant interest in the landholder; or

(b)after an interest referred to in paragraph (a) was acquired in respect of which duty was charged, the person or an associated person acquires a further interest in the landholder.

Note:"Associated person" is defined in section 3.  "Associated transaction" is defined in sub-section (9).

(2)For the purposes of sub-section (1)(a)(ii) or (b), a person is not an associated person of another person if the Commissioner is satisfied that the interests of the persons—

(a)were acquired, and will be used, independently; and

(b)were not acquired, and will not be used, for a common purpose.

(3)Sub-section (2) does not apply if the persons are associated persons because they are related bodies corporate.

(4)For the purposes of sub-section (1), if—

(a)a person acquires an interest in a land rich landholder that is not a significant interest (the "first acquisition"); and

(b)the person or an associated person (or both) acquire another interest in the landholder (the "subsequent acquisition") later than 3 years after the first acquisition but as a result of an arrangement entered into within those 3 years—

the first acquisition, and any further acquisitions by the person or an associated person (or both) after the first acquisition but before the subsequent acquisition, are taken to have been made on the same day as the subsequent acquisition.

(5)Despite anything to the contrary in this Part, if a person within a 3 year period acquires, directly or indirectly, control over a land rich landholder, other than by a relevant acquisition dutiable under this Part, then on the acquiring of that control the person is taken, for the purposes of this Part to have made a relevant acquisition of an interest in the landholder of—

(a)100%; or

(b)the lesser percentage determined by the Commissioner to be appropriate in the circumstances.

(6)For the purposes of sub-section (5), a person acquires control over a landholder if they acquire the capacity to determine or influence the outcome or decisions about the landholder'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 landholder's financial or operating policies (even if that practice or pattern of behaviour involves the breach of an agreement or a breach of trust).

(7)Sub-section (5) applies regardless of interests held by any other person in the landholder.

(8)An interest in a landholder is not counted for the purposes of this section if—

(a)the interest was acquired before 15 November 1987; or

(b)the interest was acquired at a time when the landholder did not hold land in Victoria; or

(c)the acquisition of the interest was an exempt acquisition under section 85.

(9)In this section—

"associated transaction" in relation to the acquisition of an interest in a landholder by a person, means an acquisition of an interest in the landholder by another person in circumstances in which—

(a)those persons are acting in concert; or

(b)the acquisitions form, evidence, give effect to or arise from substantially one arrangement, one transaction or one series of transactions.

80.Acquisition statements

(1)If a relevant acquisition is made, either or both the person who made the acquisition and the landholder (or, if the landholder is a unit trust scheme, the trustee of the landholder) must prepare a statement (an "acquisition statement") and lodge it with the Commissioner within 3 months after the date of the relevant acquisition.

(2)The acquisition statement is to be prepared in an approved form and must contain the following information—

(a)the name and address of the person who has acquired the interest;

(b)in relation to each interest acquired, the date on which it was acquired and whether it is an exempt acquisition;

(c)if the relevant acquisition results from the aggregation of the interests of associated persons, particulars of the interests acquired by the person and any associated persons on the date of the relevant acquisition and within 3 years before that date;

(d)if the relevant acquisition results from the aggregation of the interests of persons who acquired interests because of section 79(1)(a)(iii), particulars of the interests acquired by the person and all other persons involved;

(e)particulars of the total interest of the person and any associated person in the landholder at that date;

(f)the unencumbered value of all land holdings in Victoria of the landholder as at the date of the relevant acquisition;

(g)the unencumbered value of the property of the landholder at the date of the relevant acquisition;

(h)any other information the Commissioner may require.

Note:In ascertaining whether or not a liability to lodge a statement under this section exists, it is necessary to have regard to provisions of this Part that deal with—

·   acquisition generally (section 77); and

·   acquisitions that are exempt from the operation of this Part (section 85).

There is joint and several liability for the duty as between the person lodging the acquisition statement and others—see section 82.

81.When must duty be paid?

A tax default does not occur for the purposes of the Taxation Administration Act 1997 if duty is paid within 3 months after the liability to pay the duty arises.

82.Who is liable to pay the duty?

(1)The following are jointly and severally liable to pay duty chargeable under this Part—

(a)the person who makes the relevant acquisition; and

(b)the landholder or, if the landholder is a unit trust scheme, the trustee of the landholder; and

(c)if the relevant acquisition results from an aggregation of the interests of the person referred to in paragraph (a) and other persons—each of those other persons.

(2)A person, other than a person referred to in sub-section (1)(c), may recover as a debt from the person who made the relevant acquisition or a person referred to in sub-section (1)(c) the amount of any duty chargeable under this Part and any penalty paid by the first person in respect of that duty.

83.How duty is charged on relevant acquisitions

(1)Duty is chargeable, at the rate specified under this Act for a transfer of dutiable property, on the amount calculated by multiplying the unencumbered value of all land holdings of the landholder in Victoria (calculated at the date of acquisition of the interest acquired) by the proportion of that value represented by the interest acquired in the relevant acquisition.

(2)If the relevant acquisition is the acquisition of a further interest as described in section 79(1)(b), duty is chargeable as follows—

(a)first, a calculation is to be made of the duty that would be chargeable under sub-section (1) if the further interest were to be added to all interests referred to in section 79(1)(a) ("the prior interests");

(b)secondly, a calculation is to be made of the duty chargeable under sub-section (1) in respect of the prior interests;

(c)the duty chargeable on the acquisition of the further interest is the amount calculated under paragraph (a) less the amount calculated under paragraph (b).

(3)Duty payable under this section is to be reduced by an amount (if any) calculated in accordance with the following formula—

where—

Ais the unencumbered value of the land holdings in Victoria of the landholder at the time the relevant acquisition was made; and

Bis the unencumbered value of all property of the landholder at that time; and

Cis the sum of—

(a)the duty under this Act paid or payable at the rate applicable to transactions involving marketable securities, in respect of—

(i)a dutiable transaction in relation to the units or shares; or

(ii)a capital reduction or a rights alteration under Part 3 by which an interest in the landholder was acquired; or

(iii)an allotment under Part 4 by which an interest in the landholder was acquired; and

(b)any duty of a like nature so paid or payable under a law of another Australian jurisdiction.

(4)This section is subject to Division 4.

Note:In ascertaining the duty payable under this section, it is necessary to have regard to provisions of Division 4 of this Part that deal with—

·   rescission of agreements for the sale or transfer of land and other property (section 88); and

·   acquisitions for securing financial accommodation (section 89).

84.Phasing-in of duty

If the unencumbered value of land holdings in Victoria of a landholder exceeds $1 000 000 but does not exceed $1 500 000, the duty chargeable under this Part is to be calculated in accordance with the following formula—

where—

Ais the unencumbered value of the land holdings in Victoria of the landholder at the time the relevant acquisition was made; and

Bis the duty that, apart from this section, would be chargeable under this Part.

Division 4Exemptions, Concessions and Supplemental Provisions—

85.Exemptions

(1)An acquisition by a person of an interest in a landholder is an exempt acquisition—

(a)if the means by which the person acquired the interest would have resulted in no ad valorem duty being payable under Chapter 2 had the subject of the acquisition been a transfer of the land of the landholder to the person; or

(b)if the interest was acquired in the person's capacity as—

(i)a receiver or trustee in bankruptcy; or

(ii)a liquidator; or

(iii)an executor or administrator of the estate of a deceased person; or

(c)if the interest was acquired solely as the result of the making of a compromise or arrangement with the landholder's creditors under Part 5.1 of the Corporations Act that has been approved by the court, not being a compromise or arrangement that the Commissioner is satisfied was made with the intention of defeating the operation of this Part; or

(d)if the interest concerned is acquired solely from a pro rata increase in the interests of all unit holders or shareholders.

(2)An acquisition by a person of an interest in a landholder is an exempt acquisition if the Commissioner so determines, being satisfied that the application of this Part to the acquisition in the particular case would not be just and reasonable.

86.Maximisation of entitlements on distribution of property

(1)This section applies to any calculation, for the purposes of this Part, of the entitlement of a person (the "interested person") to participate in a distribution of the property of a landholder, whether on a winding up, a vesting of trust property or otherwise.

(2)A calculation is to be made based, firstly, on a distribution carried out in accordance with the constitution of the landholder, and with any law relevant to the distribution, as in force at the time of distribution, and the entitlement of the interested person is to be evaluated accordingly.

(3)Next, a calculation is to be made based on a distribution carried out after the interested person, and any other person whom the interested person has power to direct with respect to such a distribution or who is, in relation to the interested person, an associated person, had exercised all powers and discretions exercisable by them—

(a)to effect or compel an alteration to the constitution of the landholder; and

(b)to vary the rights conferred by units or shares in the landholder; and

(c)to effect or compel the substitution or replacement of units or shares in the landholder with other units or shares in it—

in such a manner as would maximise the value of the entitlement, and the entitlement of the interested person is to be evaluated accordingly.

(4)The results obtained by an evaluation of the interested person's entitlement in accordance with sub-sections (2) and (3) are then to be compared, and whichever evaluation results in a greater entitlement is the correct evaluation, for the purposes of this Part, of the entitlement, unless the Commissioner, being satisfied that the application of this sub-section in the particular case would be inequitable, determines otherwise.

(5)A reference in this section to the constitution of a landholder is a reference, if the landholder is a unit trust scheme, to the trust deed or other document that contains the rules of the trust.

87.Valuation of property

(1)The provisions of this Act for ascertaining the value of transfers chargeable with ad valorem duty apply in the same way to an acquisition statement under this Part and the value of land holdings mentioned in it.

(2)In determining the value of land holdings under this Part, any arrangement made in respect of the land holdings that has the effect of reducing the value is to be disregarded, subject to sub-section (3).

(3)An arrangement is not to be disregarded if the Commissioner is satisfied that the arrangement was not made as part of an arrangement or scheme with a collateral purpose of reducing the duty otherwise payable in relation to the relevant acquisition.

(4)In considering whether or not he or she is satisfied for the purposes of sub-section (3), the Commissioner may have regard to—

(a)the duration of the arrangement before the relevant acquisition; and

(b)whether the arrangement has been made with an associated person; and

(c)whether there is any commercial efficacy to the making of the arrangement other than to reduce duty; and

(d)any other matters the Commissioner considers relevant.

88.Agreements for sale, transfer or purchase of land and other property

(1)If—

(a)at the time of acquisition of an interest by any person in a land rich landholder that necessitates the lodgement of an acquisition statement under Division 3, the landholder was the vendor under an uncompleted agreement for the sale or transfer of land; and

(b)the agreement is subsequently completed—

the Commissioner is to determine whether or not duty is payable, and must assess or reassess the statement accordingly, as though the land the subject of the agreement was not, at the time of the acquisition concerned, a land holding of the landholder.

(2)If—

(a)at the time of acquisition of an interest by any person in a land rich landholder that necessitates the lodgement of an acquisition statement under Division 3, the landholder was the purchaser under an uncompleted agreement for the purchase of property other than land; and

(b)the agreement is subsequently completed—

the Commissioner is to determine whether or not duty is payable, and must assess or reassess the statement accordingly, as though the property the subject of the agreement was, at the time of the acquisition concerned, property of the landholder.

(3)If—

(a)at the time of acquisition of an interest by any person in a land rich landholder that requires the lodgement by any person of an acquisition statement under Division 3, the landholder was the purchaser under an uncompleted agreement for the sale or transfer of land; and

(b)the agreement is subsequently rescinded, annulled or otherwise terminated without completion—

the Commissioner is to determine whether or not duty is payable, and must assess or reassess the statement accordingly, as though the land the subject of the agreement was not, at the time of the acquisition concerned, a land holding of the landholder.

(4)If—

(a)at the time of acquisition of an interest by any person in a land rich landholder that requires the lodgement by any person of an acquisition statement under Division 3, the landholder was the vendor under an uncompleted agreement for the sale of property other than land; and

(b)the agreement is subsequently rescinded, annulled or otherwise terminated without completion—

the Commissioner is to determine whether or not duty is payable, and must assess or reassess the statement accordingly, as though the property the subject of the agreement was, at the time of the acquisition concerned, property of the landholder.

(5)In this section, a reference to a "landholder" includes a reference to a linked entity of the landholder and, in the case of a landholder that is a unit trust scheme, also includes a reference to a trustee of the landholder.

89.Duty concession acquisitions securing financial accommodation

(1)Except as provided by sub-section (2), an acquisition statement is not chargeable with duty insofar as it relates to an acquisition if—

(a)the person lodging the statement informs the Commissioner at the time of lodgement that the acquisition is effected for the purpose of securing financial accommodation; and

(b)the Commissioner is satisfied that the acquisition is effected for that purpose.

(2)The statement is chargeable with duty at the expiration of the period of 5 years after the date of the acquisition (or such longer period as may be determined by the Commissioner in the particular case) if the interest concerned is not—

(a)re-acquired by the person from whom it was acquired; or

(b)in the case of an acquisition by way of mortgage, conveyed by the mortgagee to a third person in exercise of the mortgagee's power of sale, within that period (or that longer period).

(3)The re-acquisition by a person of the interest concerned is not a relevant acquisition for the purposes of this Part.

89A.Re-purchase facilitieswidely held trusts—

(1)This section applies if—

(a)the trustee of a unit trust scheme that is a widely held trust redeems any units in the trust; and

(b)the redemption is done for the purpose of re-issuing or re-offering the units for sale; and

(c)as a result of the redemption, the scheme would, but for this section, cease to be a widely held trust because a unit holder, individually or together with any associated person, is beneficially entitled to more than 20% of the units in the trust.

(2)For a period of 30 days beginning on and including the day on which the redemption occurs, the definition of "widely held trust" in section 3(1) applies to the unit trust scheme as if a reference in paragraph (c)(ii) of that definition to 20% were a reference to 25%.

(3)However, if at the end of the 30-day period beginning on and including the day on which the redemption occurs, a unit holder, individually or together with any associated person, is beneficially entitled to more than 20% of the units in the unit trust scheme—

(a)the definition of "widely held trust" in section 3(1) is taken to have applied to the unit trust scheme during that period as if sub-section (2) had not been enacted; and

(b)the Commissioner must determine whether any duty is chargeable under this Act as a result of the operation of paragraph (a) and if so, must assess that duty; and

(c)a tax default occurs for the purposes of the Taxation Administration Act 1997 if the whole of any duty assessed under paragraph (b) is not paid to the Commissioner within 3 months after liability for the duty arose.

89B.Disqualifying circumstances for certain unit trust schemes

(1)In this section, "disqualifying circumstance" means a circumstance that causes a unit trust scheme that is registered under Division 7 to cease to meet the relevant criteria for registration.

(2)If a disqualifying circumstance occurs in respect of a unit trust scheme—

(a)the trustee of the unit trust scheme must give the Commissioner notice of the disqualifying circumstance within 28 days after it occurs; and

(b)the unit trust scheme is taken to have been a private unit trust scheme from and including the relevant date; and

(c)if an acquisition of a significant interest was made on or after the relevant date it becomes a relevant acquisition; and

(d)the Commissioner must make an assessment of duty chargeable under this Act as a result of the operation of paragraphs (b) and (c); and

(e)a tax default occurs for the purposes of the Taxation Administration Act 1997 if the whole of any duty assessed under paragraph (d) is not paid to the Commissioner within 3 months after liability for the duty arose.

(3)The trustee of a unit trust scheme must not fail to comply with sub-section (2)(a).

Penalty:10 penalty units.

(4)If—

(a)a disqualifying circumstance occurs in relation to a unit trust scheme; and

(b)the trustee of the unit trust scheme fails to comply with sub-section (2)(a); and

(c)duty is assessed under this Part as a result of the disqualifying circumstance—

the trustee of the unit trust scheme is liable to pay to the Commissioner, by way of penalty, an amount equal to double the amount of duty assessed as a result of the disqualifying circumstance, less any amount of duty that the trustee or any other person did pay.

(5)A penalty imposed by sub-section (4) is in addition to any penalty imposed for contravention of sub-section (3) by the trustee.

(6)The Commissioner, in such circumstances as the Commissioner considers appropriate, may remit the penalty imposed by sub-section (4) by any amount.

(7)In this section—

"relevant date" means—

(a)if the disqualifying circumstance is a circumstance that causes a registered imminent public unit trust scheme to cease to meet the criteria set out in section 89M(2)(a)—the date on which the 12 month period referred to in that section began;

(b)if the disqualifying circumstance is a circumstance that causes a registered imminent wholesale unit trust scheme to cease to meet the criteria set out in section 89P(2)(a)—the date on which the 12 month period referred to in that section began;

(c)in any other case—the date the disqualifying circumstance occurred.

89C.Sale of private unit trust scheme through conversion to public unit trust scheme

(1)This section applies if—

(a)a land rich landholder that is a private unit trust scheme becomes, through whatever means, a public unit trust scheme; and

(b)under an agreement or arrangement made before the scheme becomes a public unit trust scheme—

(i)a payment is made to or on behalf of any person who held units in the private unit trust scheme in respect of 20% or more of that person's interest in the private unit trust scheme immediately before the agreement or arrangement was made; or

(ii)a person referred to in sub-paragraph (i) ceases to hold an interest in the public unit trust scheme that is relevant to an interest of at least 20% in the private unit trust scheme immediately before the agreement or arrangement was made (whether as a consequence of a payment referred to in that sub-paragraph or otherwise).

(2)On a payment referred to in sub-section (1)(b)(i) being made or on a person ceasing to hold an interest referred to in sub-section (1)(b)(ii)—

(a)the unit trust scheme is taken, for the purposes of this Part, to have always been a private unit trust scheme; and

(b)all acquisitions of the interests of persons referred to in sub-section (1)(b)(i) are taken to have been a single acquisition of an interest in the private unit trust scheme; and

(c)the Commissioner must make an assessment of duty chargeable under this Act (if any) as a result of the operation of paragraphs (a) and (b); and

(d)a tax default occurs for the purposes of the Taxation Administration Act 1997 if the whole of any duty assessed under paragraph (c) is not paid to the Commissioner within 3 months after liability for the duty arose.

(3)In determining whether a person has a significant interest in the unit trust scheme, the only interests to be taken into account are those that existed immediately before the agreement or arrangement referred to in sub-section (1)(b) was made.

(4)Despite anything to the contrary in Division 1 of Part 2 of Chapter 11, nothing to which this section applies is capable of being an eligible transaction for the purposes of that Division.

Division 5—Conversion of Public Unit Trust Schemes to Private Unit Trust Schemes

89D.Interpretation and application of Division

(1)In this Division—

"aggregated acquisitions" means—

(a)a transitional acquisition; and

(b)an acquisition by an associated person of the person who made the transitional acquisition; and

(c)an acquisition by any person made in response to or in accordance with the offer or agreement that resulted in the transitional acquisition; and

(d)an acquisition by the person who made the transitional acquisition or by an associated person of that person, made within 6 months before the making of the offer or agreement that resulted in the transitional acquisition; and

(e)an acquisition by the person who made the transitional acquisition or by an associated person of that person, made within 6 months after the expiry of the offer or agreement that resulted in the transitional acquisition;

"offer" includes invitation;

"relevant unitholder" in a unit trust scheme means a unitholder—

(a)who is beneficially entitled to units and holds at least the minimum subscription under the prospectus or product disclosure statement; and

(b)who, individually or together with any associated person, is beneficially entitled to not more than 20% of the units in the scheme;

"transitional acquisition" means an acquisition by a person of units in a unit trust scheme that, immediately before the acquisition was a public unit trust scheme—

(a)made in response to or in accordance with an offer or arrangement; and

(b)that by itself, or when aggregated with acquisitions made by an associated person, results in the unit trust scheme becoming a private unit trust scheme.

(2)Despite anything to the contrary in section 3, for the purposes of this Division (and for determining whether duty is payable under this Part on an acquisition referred to in this Division) a public unit trust scheme that is a listed trust is deemed to become a private unit trust scheme when the number of relevant unitholders falls below 300.

(3)Nothing in this Division applies to a public unit trust scheme that is a listed trust all the units in which have been listed for quotation on the Australian Stock Exchange or an exchange of the World Federation of Exchanges for 3 years or more.

89E.When public unit trust scheme becomes a private unit trust scheme

(1)Subject to sub-section (2), if, as a result of the acquisition of one or more units in a unit trust scheme that, immediately before the acquisition, was a public unit trust scheme, the scheme becomes a private unit trust scheme, the scheme is taken to have become a private unit trust scheme immediately before that acquisition.

(2)If a transitional acquisition in a public unit trust scheme is made, the scheme is taken to have become a private unit trust scheme immediately before the first of the aggregated acquisitions.

(3)In determining for the purposes of this Part whether a person makes a relevant acquisition, the aggregated acquisitions are together taken to form one acquisition made by the person or an associated person at the time of the last of those acquisitions.

(4)If the Commissioner is satisfied that an acquisition that would otherwise form part of the aggregated acquisitions is not made for a common purpose, the Commissioner is to treat that acquisition as not forming part of the aggregated acquisitions.

89F.Interstate security duty

(1)If interstate security duty has been paid in respect of any acquisition forming part of the aggregated acquisitions, the amount of the aggregated duty that is attributable to the aggregated acquisitions is to be reduced by the same proportion of the interstate security duty as the value of the land holdings of the landholder in Victoria bears to the aggregate value of all land holdings of the landholder.

(2)In sub-section (1)—

"aggregated duty" means duty that is chargeable under this Part because of section 89E in respect of the aggregated acquisitions;

"interstate security duty" means duty chargeable in another State or a Territory on a transfer of any marketable security or right in respect of shares.

Division 6—Tax Avoidance Schemes

89G.Imposition of duty

(1)This Division imposes duty on an acquisition in respect of which duty would have been chargeable under this Part but for a tax avoidance scheme.

(2)Duty is payable at the time it would have been payable but for the tax avoidance scheme.

89H.What is a tax avoidance scheme?

(1)For the purposes of this Division, a "tax avoidance scheme" is a scheme that—

(a)directly or indirectly has tax avoidance as its purpose or effect; or

(b)directly or indirectly has tax avoidance as one of its purposes or effects, if the purpose or effect of tax avoidance is not merely incidental to another purpose or effect of the scheme—

whether the scheme had that effect at the time that it was entered into, or only subsequently.

(2)In this Division—

"scheme" includes the whole or any part of—

(a)a contract, agreement, arrangement, understanding, promise or undertaking (including all steps and transactions by which it is carried into effect)—

(i)whether made or entered into orally or in writing;

(ii)whether express or implied;

(iii)whether or not enforceable;

(b)a plan, proposal, action, course of action or course of conduct, whether or not unilateral;

(c)a trust;

"tax avoidance" means—

(a)an elimination or reduction in the liability of a person for duty under this Part;

(b)a postponement in the liability of a person to pay duty under this Part.

89I.Anti-avoidance provision

(1)If the Commissioner considers that a person has participated in a tax avoidance scheme, the Commissioner may—

(a)disregard the scheme; and

(b)determine what duty would have been payable under this Part but for the scheme; and

(c)make an assessment or reassessment under the Taxation Administration Act 1997 of the tax liability of the person or any other person to give effect to that determination.

(2)For the purposes of making a determination under sub-section (1), the Commissioner may—

(a)deem a company or a unit trust scheme to be a landholder of a particular class;

(b)deem a landholder (or, if the landholder is a unit trust scheme, the trustee of the scheme) to hold land, and determine the extent of that landholding;

(c)deem a landholder to be land-rich;

(d)deem a relevant acquisition to have been made by any person and determine the extent of that interest;

(e)determine the value of any land.

(3)Nothing in sub-section (2) limits the powers of the Commissioner to make a determination under sub-section (1).

(4)A tax default occurs for the purposes of the Taxation Administration Act 1997 if the whole of any duty assessed or reassessed in accordance with sub-section (1)(c) is not paid to the Commissioner within 3 months after liability for the duty arose.

89J.Misleading information

(1)This section applies to a person who is employed or concerned in—

(a)the preparation of an instrument in relation to the acquisition of an interest in a landholder; or

(b)the provision of advice in relation to the acquisition of an interest in a landholder; or

(c)the conduct of the acquisition of an interest in a landholder.

(2)The person must not omit from, or fail to include in, the instrument or in any material presented to the Commissioner any fact or circumstance affecting the liability of any person for duty under this Part.

Penalty:10 penalty units.

Division 7—Registration of Unit Trust Schemes

89K.Definitions

(1)In this Division—

"qualified investor" in a unit trust scheme, means a person who holds units in the unit trust scheme in any of the following capacities—

(a)as trustee of a complying superannuation fund that has no less than 300 members;

(b)as trustee of a complying approved deposit fund that has no less than 300 members;

(c)as trustee of a pooled superannuation trust;

(d)as trustee of a public unit trust scheme;

(e)as a life company, if its holding of the units in the unit trust scheme is an investment of a statutory fund maintained by it under the Life Insurance Act 1995 of the Commonwealth;

(f)as an agent for a trustee or life company referred to in any of the preceding paragraphs in its capacity as such an agent;

(g)as the trustee of a wholesale unit trust scheme;

(h)in a capacity approved by the Commissioner under sub-section (3).

(2)For the purposes of paragraph (e) of the definition of "qualified investor" in sub-section (1), the holding of units by a life company by way of an investment of a statutory fund of the life company is taken to be a holding of units by the life company in a separate capacity from a holding of units by the life company by way of investment of another statutory fund of the life company.

(3)The Commissioner may approve a capacity to be a capacity for the purposes of paragraph (h) of the definition of "qualified investor" in sub-section (1) if satisfied that the capacity corresponds to a capacity referred to in paragraph (a), (b), (c), (d), (e) or (f) under the law of an external Territory or of a country outside Australia.

89L.Application for registration

(1)The trustee of a unit trust scheme may apply to the Commissioner for registration of the scheme as—

(a)an imminent public unit trust scheme; or

(b)a declared public unit trust scheme; or

(c)a wholesale unit trust scheme; or

(d)an imminent wholesale unit trust scheme.

(2)An application must be accompanied by a statement in an approved form made by the applicant.

(3)In considering an application for registration under this Division, the Commissioner may take into account any matter he or she considers relevant.

89M.Registration of imminent public unit trust schemes

(1)On application by the trustee of a unit trust scheme, the Commissioner may register the unit trust scheme as an imminent public unit trust scheme if the Commissioner is satisfied that the scheme meets the criteria for registration as an imminent public unit trust scheme.

(2)The criteria for registration as an imminent public unit trust scheme are that—

(a)the unit trust scheme will become a listed trust or a widely held trust within 12 months after the later of—

(i)the day on which the first units in the scheme were issued; and

(ii)the date of the prospectus or product disclosure statement for the offer of units to the public; and

(b)units issued in the scheme before the scheme becomes a listed trust or widely held trust have been or will be issued only for the purpose of the scheme becoming a listed trust or a widely held trust; and

(c)registration is not being sought for the purpose of, or as part of a scheme or arrangement with a collateral purpose of, avoiding or reducing duty otherwise chargeable under this Part.

89N.Registration of declared public unit trust schemes

(1)On application by the trustee of a unit trust scheme, the Commissioner may register the unit trust scheme as a declared public unit trust scheme if the Commissioner is satisfied that the scheme meets the criteria for registration as a declared public unit trust scheme.

(2)The criteria for registration as a declared public unit trust scheme are—

(a)the scheme should be registered as a declared public unit trust scheme; and

(b)registration is not being sought for the purpose of, or as part of a scheme or arrangement with a collateral purpose of, avoiding or reducing duty otherwise chargeable under this Part.

89O.Registration of wholesale unit trust schemes

(1)On application by the trustee of a unit trust scheme, the Commissioner may register the unit trust scheme as a wholesale unit trust scheme if the Commissioner is satisfied that the scheme meets the criteria for registration as a wholesale unit trust scheme.

(2)The criteria for registration as a wholesale unit trust scheme are—

(a)the scheme was not established for a particular investor; and

(b)either—

(i)the trustee of the scheme, as trustee, holds directly or indirectly an interest in not less than 3 parcels of land (whether in or outside Victoria), and at least 2 of those interests each have an unencumbered value of $10 000 000 or more; or

(ii)at least 6 of the unit holders in the scheme who are not associated persons each have a subscription under the scheme of not less than $3 000 000; and

(c)not less than 80% of the units in the scheme are held by qualified investors; and

(d)no qualified investor, either alone or together with associated persons, holds 50% or more of the units in the scheme; and

(e)registration is not being sought for the purpose of, or as part of a scheme or arrangement with a collateral purpose of, avoiding or reducing duty otherwise chargeable under this Part.

(3)For the purposes of sub-section (2)(b)(i), the Commissioner may treat 2 or more parcels of land as a single parcel of land if he or she is satisfied that it is appropriate to do so, having regard to—

(a)the ownership of the parcels of land; and

(b)the proximity of the parcels of land; and

(c)the use of the parcels of land; and

(d)any other matter the Commissioner considers to be relevant.

89P.Registration of imminent wholesale unit trust schemes

(1)On application by the trustee of a unit trust scheme, the Commissioner may register the unit trust scheme as an imminent wholesale unit trust scheme if the Commissioner is satisfied that the scheme meets the criteria for registration as an imminent wholesale unit trust scheme.

(2)The criteria for registration as an imminent wholesale unit trust scheme are—

(a)the unit trust scheme will meet the criteria for registration as a wholesale unit trust scheme within 12 months after the day on which the first units in the scheme were issued to a qualified investor; and

(b)units issued in the scheme before the scheme meets the criteria for registration as a wholesale unit trust scheme have been or will be issued only for the purpose of the scheme meeting those criteria; and

(c)registration is not being sought for the purpose of, or as part of a scheme or arrangement with a collateral purpose of, avoiding or reducing duty otherwise chargeable under this Part.

89Q.Duration of registration

(1)Registration of a unit trust scheme under this Division takes effect on the day specified by the Commissioner in respect of the scheme, which may be a day occurring before the day on which registration is granted.

(2)Unless cancelled earlier, the duration of registration under this Division is—

(a)3 years for a registered declared public unit trust scheme or wholesale unit trust scheme;

(b)12 months for a registered imminent public unit trust scheme or imminent wholesale unit trust scheme.

(3)Registration of a unit trust scheme under this Division may be renewed on application made under section 89L.

89R.Reporting requirements

(1)As a condition of registration under this Division, the Commissioner may impose requirements on the trustee of the registered scheme to give the Commissioner information specified by the Commissioner about the scheme at the times required by the Commissioner.

(2)Requirements may be imposed under sub-section (1) at the time of registration or at any subsequent time.

89S.Cancellation of registration

(1)The Commissioner may cancel the registration of a unit trust scheme at any time if the Commissioner is satisfied that a disqualifying circumstance within the meaning of section 89B has occurred in respect of that scheme.

(2)The Commissioner cancels the registration of a unit trust scheme by giving written notice of cancellation to the trustee of the scheme including the reasons for the cancellation.'.

13.New Part 5 inserted in Chapter 3

After Part 4 of Chapter 3 of the Duties Act 2000 insert—

'Part 5Acquisition of Land Use Entitlements by Allotment of Shares or Issue of Units—

103A.When does a liability for duty arise?

A liability for duty charged by this Part arises when a land use entitlement is acquired by an allotment of shares or an issue of units to any person.

103B.When must duty be paid?

A tax default does not occur for the purposes of the Taxation Administration Act 1997 if duty is paid within 3 months after the liability to pay the duty arises.

103C.Who is liable to pay the duty?

Duty chargeable under this Part is payable by the person who acquires the land use entitlement.

103D.Acquisition of land use entitlement

(1)A person who acquires a land use entitlement by an allotment of shares or an issue of units must lodge a statement (an "acquisition statement") with the Commissioner in respect of the entitlement.

(2)The statement must be lodged within 3 months after the entitlement is so acquired.

103E.Form of statement

An acquisition statement required to be lodged by a person is to be in an approved form and is to contain the following information—

(a)the name and address of the person; and

(b)the name of the relevant company or unit trust scheme; and

(c)the date on which the land use entitlement was acquired; and

(d)the consideration paid for the relevant shares or units; and

(e)any other information required by the Commissioner for the purposes of this Chapter.

103F.Assessment of duty

The share allotment or unit issue by which a person acquires a land use entitlement is chargeable with duty at the general rate of duty set out in section 28 on the dutiable value of the land use entitlement.'.

14.Consequential amendment

At the end of the note at the foot of section 70 of the Duties Act 2000 insert—

"Duty is charged under Part 5 on the allotment of units or shares that confer a land use entitlement.".

15.New section 273 substituted

For section 273 of the Duties Act 2000 substitute—

"273.Valuation of property

(1)The Commissioner may require a person who is liable to duty determined by reference to the value of property to provide—

(a)a declaration by a competent valuer as to the unencumbered value of the property; or

(b)any other evidence of that value that the Commissioner thinks fit.

(2)If—

(a)a taxpayer provides information to the Commissioner as to the value of any property that is relevant to an assessment of duty (whether in compliance with a requirement under sub-section (1) or otherwise); and

(b)the Commissioner considers that the value of the property is understated—

the Commissioner may refer the matter to the Valuer-General or another competent valuer for valuation of the property.

(3)The taxpayer must pay the cost of a valuation under sub-section (2) if—

(a)that valuation exceeds the valuation provided by the taxpayer by 15% or more; and

(b)the taxpayer does not object to the assessment of duty based on the valuation under sub-section (2) or, if the taxpayer does object, the valuation of the property as determined on objection, appeal or review exceeds the valuation provided by the taxpayer by 15% or more.".

16.Transitional provisions

In Schedule 2 to the Duties Act 2000, after clause 19 insert—

"20.State Taxation Acts (Tax Reform) Act 2004

(1)Sections 59 and 60, as amended by section 8 of the State Taxation Acts (Tax Reform) Act 2004, apply to a transfer to an eligible pensioner of dutiable property being an estate in fee simple in land if the contract of sale of the land was made on or after 1 May 2004.

(2)Sections 59 and 60, as in force immediately before the commencement of section 8 of the State Taxation Acts (Tax Reform) Act 2004, continue to apply to a transfer to an eligible pensioner of dutiable property being an estate in fee simple in land after that commencement if the contract of sale of the land was made before 1 May 2004.".

17.Further transitional provisions

After clause 20(2) of Schedule 2 to the Duties Act 2000 insert—

'(3)An acquisition by a person before the commencement day of an interest in a unit trust scheme that was a public unit trust scheme within the meaning of this Act as in force immediately before the commencement day is an exempt acquisition.

(4)If—

(a)a person who made an acquisition in a private unit trust scheme before the commencement day makes a relevant acquisition in the scheme on or after the commencement day; and

(b)the aggregation of the relevant interests would entitle the person, in the event of the distribution of all the property of the scheme immediately after the later or latest acquisition was made, to 20% or more of the property distributed but less than 50% of that property—

duty is chargeable under section 83 only in respect of the relevant acquisition that occurred on or after the commencement day.

(5)A reference in sub-clause (4) to a private unit trust scheme is a reference to a scheme that—

(a)was a private unit trust scheme within the meaning of this Act as in force immediately before the commencement day; and

(b)continues to be a private unit trust scheme within the meaning of this Act as in force on and after the commencement day.

(6)This Act, as in force immediately before the commencement day, continues to apply in respect of any transactions occurring on or after that day that resulted from a written agreement made before that day.

(7)Without limiting sub-clause (6)—

(a)section 89C does not apply if the agreement or arrangement referred to in section 89C(1)(b) was made before the commencement day;

(b)section 89E does not apply to or in relation to an acquisition referred to in that section—

(i)made before the commencement day; or

(ii)made in response to an offer or invitation made or arrangement entered into before that day.

(8)In this clause—

"commencement day" means the day on which section 12 of the State Taxation Acts (Tax Reform) Act 2004 came into operation.'.

__________________

Part 3First Home Owner Grant Act 2000—

18.Additional grant

At the end of section 18 of the First Home Owner Grant Act 2000 insert—

'(2)Subject to sub-sections (3) and (4), an additional amount of $5000 is payable if—

(a)the commencement date of the eligible transaction is on or after 1 May 2004 and before 1 July 2005; and

(b)the consideration for the eligible transaction does not exceed $500 000.

(3)Sub-section (2) does not apply to the extent that the amount of the first home owner grant (including the additional amount referred to in that sub-section) would exceed the consideration for the eligible transaction.

(4)Sub-section (2) also does not apply if the Commissioner is satisfied that the contract that formed the basis of the eligible transaction replaces a contract made before 1 May 2004 ("the earlier contract"), and the earlier contract was—

(a)a contract for the purchase of the same home; or

(b)a comprehensive home building contract to build the same or a substantially similar home.

(5)If an eligible pensioner (within the meaning of the Duties Act 2000) to whom section 60A(2) of that Act applies elects under that section to receive an exemption or concession under section 59 or 60 of that Act in respect of a transfer of land, he or she is not entitled to any amount under sub-section (2) of this section in respect of the eligible transaction relating to that land.'.

19.New sections 46A and 46B inserted

After section 46 of the First Home Owner Grant Act 2000 insert—

"46A.Temporary grant for certain home owners who are not otherwise eligible for grant

(1)The Treasurer, on the advice of the Commissioner, may pay an amount that is the lesser of $5000 or the consideration paid for the purchase to a person who—

(a)purchases land under a contract for sale made on or after 1 May 2004 and before 1 July 2005; and

(b)but for section 63A of the Duties Act 2000, would be entitled to an exemption, concession or refund under section 62 or 63 of that Act in respect of the transfer of the land to the person; and

(c)is not eligible for a first home owner grant in respect of the purchase of the land.

(2)The Consolidated Fund is appropriated to the necessary extent for the purposes of sub-section (1).

46B.Commissioner may require information

(1)For the purpose of determining whether to advise the Treasurer to make a payment to a person under section 46A, the Commissioner may require the person—

(a)to give the Commissioner any information required by the Commissioner; or

(b)to produce to the Commissioner any document required by the Commissioner.

(2)A person must not give any information or produce any document under sub-section (1) that is false or misleading in a material particular.

Penalty:60 penalty units.

(3)A person is not guilty of an offence against sub-section (2) if the court hearing the charge is satisfied that the person did not know that the information or document was false or misleading.".

__________________

Part 4Land Tax Act 1958—

20.New section 7A substituted

For section 7A of the Land Tax Act 1958 substitute—

"7A.Minimum assessment

(1)If the total amount of land tax payable under this Act for a year after 2004 by an owner of land would, but for this section, be less than $175, no land tax is payable for that year by that owner.

(2)If the total amount of land tax payable under this Act for a year after 2004 in respect of transmission easements held by a transmission easement holder would, but for this section, be less than $150, no land tax is payable for that year in respect of those easements by that easement holder.".

21.Revised land tax rates and thresholds

(1)In section 13M(b) of the Land Tax Act 1958, for "clause 5" substitute "clause 4B".

(2)After clause 4A of the Second Schedule to the Land Tax Act 1958 insert—

"4B.Land tax in respect of transmission easements for 2005 and subsequent years

If the total value of transmission easements held by a transmission easement holder as assessed under this Act for 2005 or a subsequent year is not less than the amount shown in column 1 of an item in Table DB and, if an amount is shown in column 2 of that item, less than the amount shown in column 2 of that item, the duty of land tax payable in respect of those easements is the amount determined in accordance with column 3 of that item.

TABLE DB

Item	Column 1	Column 2	Column 3
$	$
1.	0	150 000	Nil
2.	150 000	200 000	$150 and 0×1 cents for each $1 of the value that exceeds $150 000
3.	200 000	540 000	$200 and 0×2 cents for each $1 of the value that exceeds $200 000
4.	540 000	675 000	$880 and 0×5 cents for each $1 of the value that exceeds $540 000
5.	675 000	810 000	$1555 and 1 cent for each $1 of the value that exceeds $675 000
6.	810 000	1 080 000	$2905 and 1×75 cents for each $1 of the value that exceeds $810 000
7.	1 080 000	1 620 000	$7630 and 2×75 cents for each $1 of the value that exceeds $1 080 000
8.	1 620 000	2 700 000	$22 480 and 3 cents for each $1 of the value that exceeds $1 620 000
9.	2 700 000	$54 880 and 5 cents for each $1 of the value that exceeds $2 700 000

".

(3)In the heading to clause 5 of the Second Schedule to the Land Tax Act 1958, for "subsequent years" substitute "2004".

(4)In clause 5 of the Second Schedule to the Land Tax Act 1958, for the expression commencing "If" and ending "column 3 of that item." substitute—

"If the total unimproved value of land of an owner as assessed under this Act for 2003 or 2004 is not less than the amount shown in column 1 of an item in Table E and, if an amount is shown in column 2 of that item, less than the amount shown in column 2 of that item, the duty of land tax payable on the land is the amount determined in accordance with column 3 of that item.".

(5)After clause 5 of the Second Schedule to the Land Tax Act 1958 insert—

"6.Land tax for 2005

If the total unimproved value of land of an owner as assessed under this Act for 2005 is not less than the amount shown in column 1 of an item in Table F and, if an amount is shown in column 2 of that item, less than the amount shown in column 2 of that item, the duty of land tax payable on the land is the amount determined in accordance with column 3 of that item.

TABLE F

Item	Column 1	Column 2	Column 3
$	$
1.	0	175 000	Nil
2.	175 000	200 000	$175 and 0×1 cents for each $1 of the value that exceeds $175 000
3.	200 000	540 000	$200 and 0×2 cents for each $1 of the value that exceeds $200 000
4.	540 000	710 000	$880 and 0×5 cents for each $1 of the value that exceeds $540 000
5.	710 000	850 000	$1730 and 1 cent for each $1 of the value that exceeds $710 000
6.	850 000	1 130 000	$3130 and 1×75 cents for each $1 of the value that exceeds $850 000
7.	1 130 000	1 620 000	$8030 and 2×75 cents for each $1 of the value that exceeds $1 130 000
8.	1 620 000	2 700 000	$21 505 and 3 cents for each $1 of the value that exceeds $1 620 000
9.	2 700 000	$53 905 and 4 cents for each $1 of the value that exceeds $2 700 000

7.Land tax for 2006

If the total unimproved value of land of an owner as assessed under this Act for 2006 is not less than the amount shown in column 1 of an item in Table G and, if an amount is shown in column 2 of that item, less than the amount shown in column 2 of that item, the duty of land tax payable on the land is the amount determined in accordance with column 3 of that item.

TABLE G

Item	Column 1	Column 2	Column 3
$	$
1.	0	175 000	Nil
2.	175 000	200 000	$175 and 0×1 cents for each $1 of the value that exceeds $175 000
3.	200 000	540 000	$200 and 0×2 cents for each $1 of the value that exceeds $200 000
4.	540 000	750 000	$880 and 0×5 cents for each $1 of the value that exceeds $540 000
5.	750 000	900 000	$1930 and 1 cent for each $1 of the value that exceeds $750 000
6.	900 000	1 190 000	$3430 and 1×75 cents for each $1 of the value that exceeds $900 000
7.	1 190 000	1 620 000	$8505 and 2×75 cents for each $1 of the value that exceeds $1 190 000
8.	1 620 000	2 700 000	$20 330 and 3 cents for each $1 of the value that exceeds $1 620 000
9.	2 700 000	$52 730 and 3×75 cents for each $1 of the value that exceeds $2 700 000

8.Land tax for 2007

If the total unimproved value of land of an owner as assessed under this Act for 2007 is not less than the amount shown in column 1 of an item in Table H and, if an amount is shown in column 2 of that item, less than the amount shown in column 2 of that item, the duty of land tax payable on the land is the amount determined in accordance with column 3 of that item.

TABLE H

Item	Column 1	Column 2	Column 3
$	$
1.	0	175 000	Nil
2.	175 000	200 000	$175 and 0×1 cents for each $1 of the value that exceeds $175 000
3.	200 000	540 000	$200 and 0×2 cents for each $1 of the value that exceeds $200 000
4.	540 000	750 000	$880 and 0×5 cents for each $1 of the value that exceeds $540 000
5.	750 000	900 000	$1930 and 1 cent for each $1 of the value that exceeds $750 000
6.	900 000	1 190 000	$3430 and 1×75 cents for each $1 of the value that exceeds $900 000
7.	1 190 000	1 620 000	$8505 and 2×75 cents for each $1 of the value that exceeds $1 190 000
8.	1 620 000	2 700 000	$20 330 and 3 cents for each $1 of the value that exceeds $1 620 000
9.	2 700 000	$52 730 and 3×5 cents for each $1 of the value that exceeds $2 700 000

9.Land tax for 2008

If the total unimproved value of land of an owner as assessed under this Act for 2008 is not less than the amount shown in column 1 of an item in Table I and, if an amount is shown in column 2 of that item, less than the amount shown in column 2 of that item, the duty of land tax payable on the land is the amount determined in accordance with column 3 of that item.

TABLE I

Item	Column 1	Column 2	Column 3
$	$
1.	0	175 000	Nil
2.	175 000	200 000	$175 and 0×1 cents for each $1 of the value that exceeds $175 000
3.	200 000	540 000	$200 and 0×2 cents for each $1 of the value that exceeds $200 000
4.	540 000	750 000	$880 and 0×5 cents for each $1 of the value that exceeds $540 000
5.	750 000	900 000	$1930 and 1 cent for each $1 of the value that exceeds $750 000
6.	900 000	1 190 000	$3430 and 1×75 cents for each $1 of the value that exceeds $900 000
7.	1 190 000	1 620 000	$8505 and 2×75 cents for each $1 of the value that exceeds $1 190 000
8.	1 620 000	2 700 000	$20 330 and 3 cents for each $1 of the value that exceeds $1 620 000
9.	2 700 000	$52 730 and 3×25 cents for each $1 of the value that exceeds $2 700 000

10.Land tax for 2009 and subsequent years

If the total unimproved value of land of an owner as assessed under this Act for 2009 or a subsequent year is not less than the amount shown in column 1 of an item in Table J and, if an amount is shown in column 2 of that item, less than the amount shown in column 2 of that item, the duty of land tax payable on the land is the amount determined in accordance with column 3 of that item.

TABLE J

Item	Column 1	Column 2	Column 3
$	$
1.	0	175 000	Nil
2.	175 000	200 000	$175 and 0×1 cents for each $1 of the value that exceeds $175 000
3.	200 000	540 000	$200 and 0×2 cents for each $1 of the value that exceeds $200 000
4.	540 000	750 000	$880 and 0×5 cents for each $1 of the value that exceeds $540 000
5.	750 000	900 000	$1930 and 1 cent for each $1 of the value that exceeds $750 000
6.	900 000	1 190 000	$3430 and 1×75 cents for each $1 of the value that exceeds $900 000
7.	1 190 000	1 620 000	$8505 and 2×75 cents for each $1 of the value that exceeds $1 190 000
8.	1 620 000	$20 330 and 3 cents for each $1 of the value that exceeds $1 620 000

".

__________________

Part 5Pay-roll Tax Act 1971—

22.Definitions

In section 3(1) of the Pay-roll Tax Act 1971—

(a)in the definition of "employer", for paragraph (b) substitute—

"(b)any person deemed to be an employer by or under section 3C or Part II;";

(b)in the definitions of "employment agency contract" and "employment agent", for "section 3D(1)" substitute "section 4(1)";

(c)in the definition of "wages", for "deemed by section 3C, 3D or 3F" substitute "deemed by or under section 3C or Part II";

(d)in the definition of "wages", for paragraph (ba) substitute—

"(ba)any amount deemed to be wages by or under section 3C or Part II;".

23.Repeal of existing employment agent provisions

Sections 3D, 3E and 3F of the Pay-roll Tax Act 1971 are repealed.

24.New Part II inserted

After Part I of the Pay-roll Tax Act 1971 insert—

'Part IIEmployment Agents—

4.Interpretation

(1)For the purposes of this Act, an "employment agency contract" is a contract, whether formal or informal and whether express or implied, under which a person ("employment agent") procures the services of another person ("service provider") for a client of the employment agent.

(2)However, a contract is not an employment agency contract for the purposes of this Act if it is, or results in the creation of, a contract of employment between the service provider and the client.

(3)In this section—

"contract" includes agreement, arrangement and undertaking.

5.Employment agents deemed to be employers of service providers

(1)For the purposes of this Act—

(a)the employment agent under an employment agency contract is deemed to be an employer; and

(b)the person who performs work for or in relation to which services are supplied to the client under an employment agency contract is deemed to be an employee of the employment agent; and

(c)the following are deemed to be wages paid or payable by the employment agent under an employment agency contract—

(i)any amount paid or payable to or in relation to the service provider in respect of the provision of services in connection with the employment agency contract;

(ii)the value of any benefits provided for or in relation to the provision of services in connection with the employment agency contract that would be a fringe benefit if provided to a person in the capacity of an employee;

(iii)any payment made in relation to the service provider that would be a superannuation benefit if made in relation to a person in the capacity of an employee.

(2)An amount referred to in sub-section (1)(c) paid or payable under an employment agency contract does not include an amount in respect of any GST payable on the supply to which the employment agency contract relates.

(3)Sub-section (1)(c) does not apply to an employment agency contract to the extent that an amount, benefit or payment referred to in that sub-section would be exempt from pay-roll tax under section 10 had the service provider been paid by the client as an employee, if the client has given a declaration to that effect to the employment agent.

(4)Subject to section 5A, if an employment agent under an employment agency contract—

(a)by arrangement procures the services of a service provider for a client of the employment agent; and

(b)pays pay-roll tax in respect of an amount, benefit or payment that is, under sub-section (1)(c), deemed to be wages paid or payable by the employment agent in respect of the provision of those services in connection with that contract—

no other person (including any other person engaged to procure the services of the service provider for the employment agent's client as part of the arrangement) is liable to pay pay-roll tax in respect of wages paid or payable for the procurement or performance of those services by the service provider for the client.

5A.Agreement to reduce or avoid liability to pay-roll tax

(1)If the effect of an employment agency contract is to reduce or avoid the liability of any party to the contract to the assessment, imposition or payment of pay-roll tax, the Commissioner may—

(a)disregard the contract; and

(b)determine that any party to the contract is deemed to be an employer for the purposes of this Act; and

(c)determine that any payment made in respect of the contract is deemed to be wages for the purposes of this Act.

(2)The Commissioner cannot include in a determination under sub-section (1)(c) in respect of a contract an amount in respect of any GST payable on the supply to which the contract relates.

(3)If the Commissioner makes a determination under sub-section (1), the Commissioner must serve a notice of the determination on the deemed employer.

(4)The notice must set out the facts on which the Commissioner relies and the reasons for the determination.

(5)This section has effect in relation to employment agency contracts made before, on or after the commencement of section 24 of the State Taxation Acts (Tax Reform) Act 2004.'.

25.Exemption for group training scheme wages

(1)After section 10(1)(j) of the Pay-roll Tax Act 1971 insert—

"(k)to a new entrant who is employed—

(i)in accordance with the requirements of an approved training scheme under section 51 of the Vocational Education and Training Act 1990; and

(ii)by a not for profit organisation that is declared by notice of the Treasurer published in the Government Gazette to be an approved group training organisation for the purposes of this paragraph;".

(2)After section 10(3) of the Pay-roll Tax Act 1971 insert—

'(4)The Treasurer must consult the Minister administering Part 5 of the Vocational Education and Training Act 1990 before declaring a not for profit organisation to be an approved group training organisation for the purposes of sub-section (1)(k).

(5)For the purposes of sub-section (1)(k)—

"Commission" has the same meaning as in the Vocational Education and Training Act 1990;

"new entrant" means an apprentice or trainee who meets the requirements of the Commission for eligibility for funding as a new entrant under the applicable performance agreement under section 10 of the Vocational Education and Training Act 1990.'.

__________________

Part 6Taxation Administration Act 1997—

26.Objections concerning the valuation of property

(1)For section 100A(1) of the Taxation Administration Act 1997 substitute—

"(1)If an objection concerns the value of any property, the Commissioner must refer the matter to the Valuer-General or another competent valuer for valuation of the property.".

(2)In section 100A(2) of the Taxation Administration Act 1997—

(a)in paragraph (a), for "land" substitute "property";

(b)in paragraph (b), for "Valuer-General's valuation" substitute "valuation under sub-section (1)".

═══════════════

Endnotes

Minister's second reading speech—

Legislative Assembly: 13 May 2004

Legislative Council: 8 June 2004

The long title for the Bill for this Act was "to amend the Duties Act 2000, the First Home Owner Grant Act 2000, the Land Tax Act 1958, the Pay-roll Tax Act 1971 and the Taxation Administration Act 1997 and for other purposes."