GIFT DUTY.
No. 53 of 1941.
An Act to impose a Duty upon Gifts.
[Assented to 3rd December, 1941.]
BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title.
1. This Act may be cited as the Gift Duty Act 1941.
Commencement.
2. This Act shall be deemed to have come into operation on the twenty-ninth day of October, One thousand nine hundred and forty-one.
Incorporation.
3. The Gift Duty Assessment Act 1941 shall be incorporated and read as one with this Act.
Imposition of gift duty.
4. Gift duty, at the rates set forth in the Schedule to this Act, shall be levied and paid in respect of every gift made on or after the date of the commencement of this Act—
(a) by a person (not being a body corporate) who is domiciled in Australia, or by a body corporate which is incorporated under the law of any State or Territory which is part of the Commonwealth—of any property wherever situated; or
(b) by any other person—of any property which is situated in Australia at the time when the gift is made.
THE SCHEDULE.
RATES OF GIFT DUTY.
For the purposes of this Schedule, “value of all gifts” means the sum of the value of the gift in question and the value of all other gifts made, whether at the same time or within eighteen months previously (whether wholly or partly before the commencement of this Act or not) or eighteen months subsequently, by the same donor to the same or any other donee.
(a) Where the value of all gifts does not exceed Five hundred pounds—nil.
(b) Where the value of all gifts exceeds Five hundred pounds but does not exceed Ten thousand pounds—Three pounds per centum of the value of the gift.
(c) Where the value of all gifts exceeds Ten thousand pounds but does not exceed Twenty thousand pounds—Three pounds per centum of the value of the gift increasing by Three one-hundredths of One pound per centum for every complete One hundred pounds by which the value of all gifts exceeds Ten thousand pounds.
(d) Where the value of all gifts exceeds Twenty thousand pounds but does not exceed One hundred and twenty thousand pounds—Six pounds per centum of the value of the gift increasing by Two one-hundredths of One pound per centum for every complete One hundred pounds by which the value of all gifts exceeds Twenty thousand pounds.
(e) Where the value of all gifts exceeds One hundred and twenty thousand pounds but is less than Five hundred thousand pounds—Twenty-six pounds per centum of the value of the gift increasing by One two-hundredths of One pound per centum for every complete One thousand pounds by which the value of all gifts exceeds One hundred and twenty thousand pounds.
(f) Where the value of all gifts is Five hundred thousand pounds or more—Twenty-seven pounds eighteen shillings per centum of the value of the gift.
Overview
The Gift Duty Act 1941 was enacted by the Commonwealth Parliament to introduce a tax on gifts made by individuals and corporations within Australia and on gifts of Australian-situated property made by non-residents. The Act was designed to address the gap in Commonwealth revenue arising from gifts, ensuring that a portion of wealth transfers was subject to taxation. The primary objective of this legislation was to impose a structured duty on gifts, as evidenced by the inclusion of the Gift Duty Assessment Act 1941 and the detailed rates outlined in the Schedule. The Gift Duty Act 1941 came into operation on 29 October 1941, and it established a tiered system of taxation on gifts based on their value, ranging from nil for gifts under £500 to a maximum rate of 27.9% for gifts exceeding £500,000. This Act ensures that gift duty is levied fairly and progressively according to the value of the gifts involved.
Scope and Application
The Gift Duty Act 1941 imposes a duty on gifts made by individuals or entities within Australia, applying to gifts made on or after the commencement date of the Act. Specifically, the Act applies to gifts made by an individual domiciled in Australia or by a body corporate incorporated under the law of any state or territory of the Commonwealth, as well as gifts made by any other person if the property gifted is situated in Australia. The duty is calculated based on the value of the gift and the cumulative value of gifts made within a specified period, as detailed in the accompanying schedule. This schedule outlines various rates of gift duty, ranging from no duty for gifts under a certain value to progressively higher rates for larger gifts. The Act's jurisdictional reach is federal, applying uniformly across all states and territories within Australia, with no specific exclusions outlined in the primary text, though the rates and thresholds may be subject to adjustment through subordinate instruments.
Key Provisions
The Gift Duty Act 1941 (sections 1-4) imposes a duty on gifts made by individuals or corporations domiciled in Australia, or by any person giving property situated in Australia, on or after 29 October 1941. The Gift Duty Assessment Act 1941 is incorporated as part of this Act. The duty is levied according to the rates specified in the Schedule, which varies based on the total value of gifts made within a specific period. The rates range from nil for gifts up to £500 to 27.9% for gifts over £500,000.
Under the Gift Duty Act 1941, the primary obligations imposed on the parties governed by the Act include the requirement to pay gift duty on gifts made under the specified conditions. This involves calculating the total value of gifts made within an eighteen-month period, including those made before or after the Act's commencement, and applying the corresponding duty rate. For individuals or bodies corporate domiciled in Australia, this duty applies to any property gifted, regardless of its location. For other persons, the duty applies only to property situated in Australia at the time of the gift.
Failure to comply with the requirements of the Gift Duty Act 1941 can result in various consequences. While the Act itself does not explicitly state the penalties for non-compliance, breaches of tax legislation in Australia generally can lead to civil or criminal penalties. Civil penalties may include fines, while criminal penalties could involve imprisonment, reflecting the seriousness of evading duties imposed by law. The specific penalties would depend on the nature and severity of the breach, as well as any relevant case law or subsequent legislation.