10 October, 2012

 

 

Please find below an outline of the Australian stamp duty developments in September 2012 which may impact your business, including:

 

Transfer duty

 

  • South Australia: Statutes Amendment and Repeal (Budget 2012) Bill 2012 – the Statutes Amendment and Repeal (Budget 2012) Bill 2012 dealing with off-the-plan concessions has been laid aside by the South Australian Legislative Council.
  • Queensland: Budget 2012-13 – the Queensland Treasurer handed down the Queensland Budget 2012-13 on 11 September 2012 with significant revenue proposals announced.
  • Queensland: Fiscal Repair Amendment Bill 2012 – the Fiscal Repair Amendment Bill 2012 which makes various amendments to various Queensland Acts including changes to duty rates has received Royal Assent on 21 September 2012 as Act No 25 of 2012.
  • South Australia: Chubb Electronic Security Australia Pty Ltd v Commissioner of State Taxation – the Supreme Court of South Australia has affirmed an assessment for stamp duty relating to a corporate restructure where an ex gratia relief offer was withdrawn.
  • New South Wales: State Revenue Legislation Further Amendment Bill 2012 – the State Revenue Legislation Further Amendment Bill 2012 which seeks to amend several aspects of the Duties Act 1997 has been introduced into New South Wales Parliament.
  • Tasmania: Taxation Legislation (Miscellaneous Amendments) Bill 2012 – the Taxation Legislation (Miscellaneous Amendments) Bill 2012 which proposes a number of amendments to the Duties Act 2001 has been introduced into the House of Assembly.
  • Western Australia: Revenue Laws Amendment Bill 2012 – the Revenue Laws Amendment Bill 2012 which makes a number of minor amendments to the Duties Act 2008 has completed its passage through the Western Australian parliament and is awaiting assent.

 

Land-rich / Landholder duty

 

  • Western Australia: Oz Minerals Ltd and Commissioner of State Revenue [2012] WASAT 188 – The State Administrative Tribunal has found that a company was not a "land-holder" within the meaning of section 76ATI of the Stamp Duty Act 1921 (as it stood at the relevant time) due to the nature of Indonesian mining interests held.

 

Administration

 

  • Western Australia: Commissioner's Practice on time limits – the OSR has issued Practice Statement relating to timeframes for assessments and reassessments of duty.
  • Victoria: revised revenue ruling on objections lodged out of time – the OSR has issued a revised revenue ruling on objections lodged out of time. 
 

Fire services levy

  • Victoria: Fire Services Property Levy Bill 2012 – the Fire Services Property Levy Bill 2012 has passed the Victorian Legislative Assembly without amendment and has moved to the Legislative Council.

  

Relevant area At a glance
Transfer duty

 

South Australia: Statutes Amendment and Repeal (Budget 2012) Bill 2012

The Statutes Amendment and Repeal (Budget 2012) Bill 2012 ("Bill") has been laid aside by the South Australian Legislative Council.

 

The Bill had proposed amendments to the Stamp Duties Act 1923 (SA) to establish a scheme to provide for concessions for eligible contracts for purchases of off-the-plan city apartments.

 

The Bill was amended in the Legislative Council but was returned to the Legislative Assembly which accepted one amendment, but rejected another (these amendments did not concern the off-the-plan apartment duty concessions). However, the Legislative Council insisted on its amendment. A conference between the Houses of Parliament had been held but no agreement was reached.

 

Transfer duty

 

Queensland: Budget 2012-13

 

The Queensland Treasurer handed down the Queensland Budget 2012-13 on 11 September 2012. Key revenue proposals announced include:

 

a) The maximum rate of transfer duty will increase from 5.25% to 5.75% and the threshold for applying that rate would increase from $980,000 to $1million. This change will become effective on the day the Fiscal Repair Amendment Bill 2012 ("Bill") receives Royal Assent.

b) As announced by the previous Queensland Government, transfer duty and landholder duty will apply to the direct and indirect transfer of exploration permits and authorities to prospect from 13 January 2012.

c) The transfer of an interest in an exploration permit under a farm-in agreement would be exempt from duty. The scope and technical design of this exemption will be a matter for consultation with industry. Because this exemption has not yet been drafted into the proposed amendments, it is unclear how the OSR will administer the duties legislation pending enabling legislation to implement this exemption.

d) The current coal royalty rate (being 10% on the value above $100 per tonne) would be replaced with a rate of 12.5% on the value between $100 and $150 per tonne, and a rate of 15% on to the value above $150 per tonne. This change would commence on 1 October 2012 and be fixed for 10 years.

e) The landholder duty provisions would be amended in order to clarify their application in relation to items fixed to land where they are capable of separate ownership from the land.

f) The payroll tax threshold would increase from $1 million to $1.1 million. Scheduled annual increases of $100,000 would apply in each financial year until 2017-18.

g) A new $15,000 grant would apply for first home buyers purchasing newly constructed or off-the-plan houses or apartments valued up to $500,000.

h) The stamp duty concession of up to $7,175 for the taxpayer's principle of place of residence would be reinstated (from 1 July 2012).

i) The industry waste disposal levy would be abolished.

j) Motor vehicle registration fees would remain unchanged, and no new exemption or relief from land tax would be granted.

 

 

 

Queensland: Fiscal Repair Amendment Bill 2012

The Fiscal Repair Amendment Bill 2012 ("Bill") received Royal Assent on 21 September 2012 as Act No 25 of 2012. The Bill had passed all stages of Parliament without amendment and makes various amendments to various Queensland Acts including changes to the:

 

  • a) transfer duty rates;
  • b) first home owner grant; and
  • c) introduction of a new penalty for incorrect payment of royalties.

 

Transfer duty

 

South Australia: Chubb Electronic Security Australia Pty Ltd v Commissioner of State Taxation [2012] SASC 164

 

The Supreme Court of South Australia in Chubb Electronic Security Australia Pty Ltd v Commissioner of State Taxation has affirmed an assessment for stamp duty relating to a corporate restructure. The Acting Treasurer (SA) had earlier withdrawn its relief offer in the form of an ex gratia payment on the basis that one of the relief conditions was breached.

 

Facts

 

In 2006, Chubb Security transferred part of its business to Chubb Electronic and the remaining part to Chubb Personnel, which resulted in a liability for stamp duty for the Chubb group.

 

On 29 June 2006, the Acting Treasurer offered conditional relief in the form of an ex gratia payment equal to 95% of the stamp duty that would otherwise be payable on the transfer. The offer was subject to a "claw-back" provision that the relief would be withdrawn if, within three years from the transfer, more than 10% of the restructured property were held outside the Chubb group, or a relevant member of the group was transferred outside the Chubb group.

 

On 31 July 2008, Chubb Personnel was transferred to a third party. The Acting Treasurer withdrew the offer for relief on 20 January 2009. On 16 May 2011, the Commissioner made a stamp duty assessment to the full extent of stamp duty liability payable by the three companies.

 

Chubb Electronic sought a review of the Commissioner's assessment.

 

Decision

 

The Court affirmed the Commissioner's assessment for stamp duty. It held that the Commissioner was not authorised or permitted to take into account in the stamp duty assessment any grant or withdrawal of ex gratia relief by the Treasurer.

 

The Court held that the Commissioner was to assess stamp duty in accordance with the Stamp Duties Act 1923 (SA) and that generally the Commissioner was to do so without exercising a discretion based on matters such as hardship or the merits of a particular case. Further, an assessment by the Commissioner was not made conditional upon, or subject to, the grant of stamp duty relief by the Treasurer. Further, matters material to the grant or withdrawal of relief (founded in the underlying nature, purpose and effect of the transaction) were not matters which were material to the Commissioner’s assessment.

 

The Court made two observations which suggested that the grant or withdrawal of relief occurred independently of the stamp duty assessment, namely:

 

  • a) the scheme did not contemplate a waiver or reduction of liability, but instead ex gratia payment; and
  • b) the payment was made in respect of the "stamp duty applicable".

 

Transfer duty

 

New South Wales: State Revenue Legislation Further Amendment Bill 2012 introduced into parliament

 

The State Revenue Legislation Further Amendment Bill 2012 ("Bill") has been introduced into New South Wales Parliament. The Bill proposes to amend several aspects of the Duties Act 1997 (NSW) to:

 

 

  • a) clarify the liability to duty on a transfer of a partnership interest that occurs as a result of the retirement or admission of a partner;
  • b) provide a duty concession in respect of transfers relating to managed investment schemes; and
  • c) exempt from duty an application to register a new heavy vehicle trailer.

 

Transfer duty

 

Tasmania: Taxation Legislation (Miscellaneous Amendments) Bill 2012 has been introduced into the House of Assembly

 

The Taxation Legislation (Miscellaneous Amendments) Bill 2012 ("Bill") has been introduced into the Tasmanian House of Assembly. The Bill proposes a number of amendments to the Duties Act 2001 (Tas) to:

  • a) restore the policy intent that the transfer or surrender of a lease requires duty to be paid where a premium or consideration of more than $1,300 is paid; and
  • b) enable the Commissioner to apportion duty on transfers so that the portion of the property used for the exempt purpose of being a public road, or a park or garden for free public recreational use is exempt and the portion used for other purposes is taxable.

 

The Bill also amends the Land Tax Act 2000 (Tas) to enable the Commissioner to:

 

  • a) treat another person as the owner of the land if he or she is satisfied on reasonable grounds that the person has become the owner of the land; and
  • b) apportion land tax, with regards to council-owned parks and gardens, and land subject to a conservation covenant, so that the areas used for the exempt purpose is exempt and the area used for other purposes is taxable.

 

Transfer duty

 

Western Australia: Revenue Laws Amendment Bill 2012

 

The Revenue Laws Amendment Bill 2012 ("Bill") has completed its passage through the Western Australian parliament and is awaiting assent.

 

The Bill makes a number of minor amendments to the Duties Act 2008 (WA).

 

Landrich / Landholder duty

 

Western Australia: Oz Minerals Ltd and Commissioner of State Revenue [2012] WASAT 188

 

The Western Australian State Administrative Tribunal has found in Oz Minerals and Commissioner of State Revenue that a company was not a "land-holder" within the meaning of that term in s 76ATI of the Stamp Duty Act 1921 (WA) ("Act") (as it stood at the relevant time).

 

Facts

 

On 30 March 2007, a subsidiary of the first taxpayer, Oxiana Agincourt Holdings Ltd ("Oxiana") acquired a controlling interest in a company then named Agincourt Resources Ltd ("Agincourt Resources"). At the time of the acquisition, Agincourt held through one if its subsidiaries, certain mining interests in Indonesia. The Commissioner of State Revenue included those interests when valuing Oxiana's "land" and other assets. That led the Commissioner to assess duty of $7.6 million on the share acquisition.

Oxiana objected to the Commissioner's assessment arguing that its mining interests in Indonesia (because of their nature) did not fall within the definition of "land". The Commissioner disallowed the objection. Oxiana appealed the Commissioner's objection. Decision The Tribunal examined the nature and characteristics of the Indonesian mining interests and considered that those interests were not "similar" to the mining tenements or rights of occupancy specified in the Act. The Tribunal held that Oxiana was not a land-holder as at 30 March 2007 within the meaning of that term in s 76ATI of the Act. It ordered that the assessment be set aside and that duty be reassessed.

 

Administration

 

Western Australia: Commissioner's Practice on time limits

 

The Western Australia Office of State Revenue ("WA OSR") has issued Commissioner's Practice TAA 16.2: Remission of Penalty Tax – Certain Assessment and Reassessment Time Limits ("Commissioner's Practice").

 

The Commissioner's Practice outlines matters relating to the time periods for which assessments and reassessments of payroll tax, stamp duty, insurance duty, tax under a special tax return arrangement, transfer duty, and land tax will be made by the Commissioner.

 

Administration

 

Victoria: Revised revenue ruling on objections lodged out of time

 

The Victorian State Revenue Office ("SRO") has issued Revenue Ruling TAA.004 (version 2) (Objections lodged out of time).

 

The SRO says the Ruling has been reissued to reflect the changes in the Taxation Administration Act 1997 (Vic) and Duties Act 2000 (Vic) relating to the new Duties Online system.

 

Fire Services Levy

 

Victoria: Fire Services Property Levy Bill 2012

 

The Fire Services Property Levy Bill 2012 ("Bill") has passed the Victorian Legislative Assembly without amendment and has moved to the Legislative Council.

 

The Bill proposes to replace the existing insurance based funding regime with a single levy imposed on property owners to apply from 1 July 2013.

 

 

 

For further information, please contact:

 

Geoffrey Mann, Partner, Ashurst

geoffrey.mann@ashurst.com

 

 Nika Dharmadasa, Ashurst

nika.dharmadasa@ashurst.com

 

 

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