STAMP DUTY AMENDMENT BILL 2005

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This is a Bill, not an Act. For current law, see the Acts databases.

STAMP DUTY AMENDMENT BILL 2005

Stamp Duty Amendment Bill 2005
Mr Stirling

A BILL
for
AN ACT

to amend the Stamp Duty Act

NORTHERN TERRITORY OF AUSTRALIA

STAMP DUTY AMENDMENT ACT 2005

____________________

Act No. [ ] of 2005
____________________

TABLE OF PROVISIONS

Section

PART 1 – PRELIMINARY MATTERS

1. Short title
2. Commencement
3. Principal Act amended

PART 2 – AMENDMENTS RELATING TO INCREASE IN CONCESSION FOR FIRST HOME OWNERS

4. Amendment of section 8B (Concession for first home owners)
5. New Part 4

PART 4 – TRANSITONAL MATTERS FOR STAMP DUTY AMENDMENT ACT 2005

10. Application of Act after 3 May 2005 to concession for first home owners

PART 3 – AMENDMENTS RELATING TO EXTENSION OF EXEMPTION FROM STAMP DUTY ON CONVEYANCE OF PROPERTY USED FOR FAMILY FARMING

6. Amendment of section 8E (Exemption from duty on conveyance of family farming property to family members, family companies or family trusts)
7. New section 11

11.

Application of Act after 3 May 2005 to conveyance of family farming property

PART 4 – AMENDMENT RELATING TO ABOLITION OF STAMP DUTY ON ELECTRONIC DEBIT TRANSACTIONS

8. Amendment of Schedule 1

PART 5 – AMENDMENT RELATING TO EXTENSION OF EXEMPTION FROM STAMP DUTY ON VETERANS' MOTOR VEHICLE CERTIFICATES OF REGISTRATION

9. Amendment of Schedule 2

PART 6 – OTHER AMENDMENTS

10. New Part 1 heading

PART 1 – PRELIMINARY MATTERS

11. New Part 2 heading

PART 2 – STAMP DUTY PROVISIONS

12. New Part 3 heading

PART 3 – MISCELLANEOUS MATTERS

NORTHERN TERRITORY OF AUSTRALIA
____________________

Act No. [ ] of 2005
____________________

AN ACT

to amend the Stamp Duty Act

[Assented to [ ] 2005]
[Second reading [ ] 2005]

The Legislative Assembly of the Northern Territory enacts as follows:

PART 1 – PRELIMINARY MATTERS

1. Short title
This Act may be cited as the Stamp Duty Amendment Act 2005.

2. Commencement
(1) The provisions of this Part (except section 3) come into operation on the day on which the Administrator's assent to this Act is declared.

(2) Section 3 and Parts 2, 3 and 6 are taken to have come into operation on 3 May 2005.

(3) Parts 4 and 5 come into operation on 1 July 2005.

3. Principal Act amended
This Act amends the Stamp Duty Act.

PART 2 – AMENDMENTS RELATING TO INCREASE IN CONCESSION FOR FIRST HOME OWNERS

4. Amendment of section 8B (Concession for first home owners)
Section 8B(1), definition of "first home owner concession",

paragraph (b) –

omit

$125 000

substitute

$200 000

5. New Part 4
After section 9 –

insert

PART 4 – TRANSITIONAL MATTERS FOR STAMP DUTY AMENDMENT ACT 2005

10. Application of Act after 3 May 2005 to concession for first home owners

(1) Subject to subsection (2), the amendment of section 8B(1) effected by Part 2 of the Stamp Duty Amendment Act 2005 applies only in relation to a conveyance of land executed on or after 3 May 2005.

(2) However, section 8B(1) as in force immediately before 3 May 2005 continues to apply in relation to a conveyance of land if –

(a) the instrument effecting the conveyance replaces an instrument executed before 3 May 2005 to effect the conveyance of the same or substantially similar land;

(b) the conveyee had an option, granted before 3 May 2005, to purchase the land; or

PART 3 – AMENDMENTS RELATING TO EXTENSION OF EXEMPTION FROM STAMP DUTY ON CONVEYANCE OF PROPERTY USED FOR FAMILY FARMING

6. Amendment of section 8E (Exemption from duty on conveyance of family farming property to family members, family companies or family trusts)
(1) Section 8E(1) –

insert (in alphabetical order)

"beneficiary" includes a person in whom the trustee may determine to vest the whole or part of the trust property and a person in whom the whole or part of the trust property vests if the trustee does not make such a determination;

"primary production" means –

(a) the growing or rearing of plants (including trees, fungi and any crop) for the purpose of selling them, parts of them or their produce; or

(b) the breeding, rearing or maintenance of living creatures for the purpose of –

(i) selling them (or their progeny) for food;

(ii) the production or collection of their skins, shells or bodily produce; or

(iii) selling parts of them or their skins, shells or bodily produce;

"scheme" has the same meaning as in section 4(1) of the

Taxation (Administration) Act

;

(2) Section 8E(1), definition of "family member" –

omit

who conveys prescribed property, means –

substitute

means any of the following:

(3) Section 8E(1), definition of "family member", paragraphs (e), (f) and (g) –

omit, substitute

(e) a sibling of the person;

(f) a lineal descendant of a sibling of the person;

(g) the spouse of a family member referred to in paragraph (b) to (f);

(4) Section 8E(1), definition of "farming purposes", paragraph (a) –

omit, substitute

(a) the business of primary production; or

(5) Section 8E(2) –

omit, substitute

(2) Subject to section 8F, if a natural person, company or trustee (whether a natural person or company) conveys prescribed property to one or more family members, family companies or family trusts in accordance with this section, stamp duty is not imposed on the instrument effecting the conveyance.

(2A) Subsection (2) applies if the conveyance of prescribed property is by a natural person who does not hold the property as trustee and the property is conveyed to one or more of the following:

(a) a family member of the conveyor if the family member will not hold the property as trustee;

(b) a company that will not hold the property as trustee if –

(i) all the shareholders are family members of the conveyor; and

(ii) no shareholder holds or will hold any shares in the company as trustee;

(i) all the beneficiaries of the trust are family members of the conveyor; and

(ii) the trust deed includes provisions, that cannot be altered, specifying only family members of the conveyor may be beneficiaries of the trust and no beneficiary may be the trustee of another trust.

(2B) Subsection (2) applies if the conveyance of prescribed property is by a company that does not hold the property as trustee (the "conveyor company") and the property is conveyed to one or more of the following:

(a) a family member of all the shareholders of the conveyor company if the family member will not hold the property as trustee;

(b) a company that will not hold the property as trustee (the "conveyee company") if –

(i) all the shareholders of the conveyee company are family members of all the shareholders of the conveyor company; and

(ii) no shareholder of the conveyee company holds or will hold any shares in that company as trustee;

(i) all the beneficiaries of the trust are family members of all the shareholders of the conveyor company; and

(ii) the trust deed includes provisions, that cannot be altered, specifying only family members of the shareholders of the conveyor company may be beneficiaries of the trust and no beneficiary may be the trustee of another trust.

(2C) Subsection (2) applies if the conveyance of prescribed property is by a person who holds the property as trustee of a trust (the "conveyor trust") and the property is conveyed to one or more of the following:

(a) a family member of all the beneficiaries of the conveyor trust if the family member will not hold the property as trustee;

(b) a company that will not hold the property as trustee if –

(i) all the shareholders are family members of all the beneficiaries of the conveyor trust; and

(ii) no shareholder holds or will hold any shares in the company as trustee;

(i) all the beneficiaries of the conveyee trust are family members of all the beneficiaries of the conveyor trust; and

(ii) the trust deed includes provisions, that cannot be altered, specifying only family members of the beneficiaries of the conveyor trust may be beneficiaries of the conveyee trust and no beneficiary may be the trustee of another trust.

(6) Section 8E(3)(a) and (b) –

omit, substitute

(a) if the Commissioner is satisfied the conveyance arises from a scheme with the principal purpose of taking advantage of the benefit of the exemption from stamp duty;

(7) Section 8E(3)(c), after "property" –

insert

solely or principally

(8) Section 8E(4) –

omit

same prescribed property to one or more family members

substitute

same, or part of the same, prescribed property in accordance with this section

7. New section 11
After section 10 –

insert

11. Application of Act after 3 May 2005 to conveyance of family farming property

The amendments of section 8E effected by Part 3 of the Stamp Duty Amendment Act 2005 apply only in relation to an instrument effecting the conveyance of prescribed property executed on or after 3 May 2005.

PART 4 – AMENDMENT RELATING TO ABOLITION OF STAMP DUTY ON ELECTRONIC DEBIT TRANSACTIONS

8. Amendment of Schedule 1
Schedule 1, item 3B –

omit

PART 5 – AMENDMENT RELATING TO EXTENSION OF EXEMPTION FROM STAMP DUTY ON VETERANS' MOTOR VEHICLE CERTIFICATES OF REGISTRATION

9. Amendment of Schedule 2
Schedule 2, item 37(m) –

omit, substitute

(m) a motor vehicle certificate of registration issued –

(i) to a veteran who is eligible to receive a pension at the rate specified by section 22(4) or 24(4) of the

Veterans' Entitlements Act 1986

(Cth); and

(ii) in respect of a motor vehicle for the veteran's

non-commercial use.

Part 6 – OTHER AMENDMENTS

10. New Part 1 heading
Before section 1 –

insert

PART 1 – PRELIMINARY MATTERS

11. New Part 2 heading
After section 3 –

insert

PART 2 – STAMP DUTY PROVISIONS

12. New Part 3 heading
After section 8H –

insert

PART 3 – MISCELLANEOUS MATTERS

____________________________
__________________

EXPLANATORY STATEMENT

GENERAL OUTLINE

The purpose of this Bill is to put in place several stamp duty measures announced as part of the 2005-06 Budget. The Bill provides for:

� an increase, from 3 May 2005, in the first home owner concession on stamp duty from the first $125 000 of a property’s value to the first $200 000;

� the broadening of the ‘family farm’ stamp duty exemption to primary production property generally, including conveyances either to or from certain closely held family companies and trusts;

� the extension of the stamp duty exemption for motor vehicles registered in the name of a totally and permanently incapacitated war veteran to include extreme disabled adjustment war veterans; and

� an amendment consequential to the proposed abolition of electronic debit transaction duty by the Taxation (Administration) Amendment Bill 2005.

NOTES ON CLAUSES

PART 1 – PRELIMINARY MATTERS

Clause 1. Short Title

This is a formal clause that provides for the citation of the Bill. The Bill when passed may be cited as the Stamp Duty Amendment Act 2005.

Clause 2. Commencement

This clause provides for various Parts of the Bill commencing at different times.

Subclause (1) provides that Part 1 of the Bill (containing the preliminary provisions), except section 3, commences on the Administrator’s assent being declared.

Subclause (2) provides that Parts 2, 3 and 6 (relating respectively to the concession for first home owners, the family farms exemption and other minor amendments) and section 3 commence on 3 May 2005.

Subclause (3) provides that Parts 4 and 5 (relating respectively to the abolition of duty on electronic debit transactions and to veterans’ motor vehicle certificates of registration) commence on 1 July 2005.

Clause 3. Principal Act amended

This clause provides that the Bill amends the Stamp Duty Act.

PART 2 – AMENDMENTS RELATING TO INCREASE IN CONCESSION FOR FIRST HOME OWNERS

Clause 4. Amendment of section 8B (Concession for first home owners)

This clause provides for the stamp duty concession for first home owners increasing from the first $125 000 of a property’s value to the first $200 000. This represents an increase in the maximum concession to $6800 from a maximum of $3640.60 previously.

Clause 5. New Part 4

This clause inserts a new Part into the Stamp Duty Act entitled “PART 4 – TRANSITIONAL MATTERS FOR STAMP DUTY AMENDMENT ACT 2005”.

A new section 10 entitled “Application of Act after 3 May 2005 to concession for first home owners” is inserted. New section 10(1) provides that, subject to new section 10(2), the increased first home owner concession will only apply to a conveyance executed on or after 3 May 2005.

New section 10(2) ensures that the increased concession will not apply to a conveyance executed on or after 3 May 2005 where:

� it replaces a conveyance executed before 3 May 2005 for the same or substantially similar land;

� the conveyee had an option, granted before 3 May 2005, to purchase the land; or

� the conveyor had an option, granted before 3 May 2005, to require the conveyee to purchase the land.

PART 3 – AMENDMENTS RELATING TO EXTENSION OF EXEMPTION FROM STAMP DUTY ON CONVEYANCE OF PROPERTY USED FOR FAMILY FARMING

Clause 6. Amendment of section 8E (Exemption from duty on conveyance of family farming property to family members, family companies or family trusts)

This clause amends section 8E of the Stamp Duty Act by:

� extending the existing exemption for the conveyance of pastoral property between family members to primary production property generally; and

� broadening the exemption by allowing it to be claimed where this property is conveyed either to or from certain closely held family companies and trusts.

Subclause (1) inserts definitions for the terms “beneficiary”, “primary production” and “scheme”.

Subclause (2) makes a consequential amendment to the definition of “family member” as a result of subclause (5).

Subclause (3) amends the definition of “family member” to correct an error relating to siblings, lineal descendents and their spouses.

Subclause (4) amends the definition of “farming purposes” by extending it from pastoral property to the business of primary production generally. As a consequence, the definition of “prescribed property” is extended to include property used solely or principally in the business of primary production.

Subclause (5) replaces section 8E(2) of the Stamp Duty Act with new sections 8E(2), 8E(2A), 8E(2B) and 8E(2C).

New section 8E(2) broadens the exemption to a conveyance of primary production property either to or from certain closely held companies and discretionary trusts. This is regardless of whether consideration passes between the parties. Previously the exemption was limited to a conveyance of pastoral property from and to natural person family members for no monetary consideration.

New section 8E(2A) provides the circumstances when the exemption in new section 8E(2) will apply if the conveyance of prescribed property is from a natural person (the “conveyor”), who does not hold the property as trustee.

As a result of these circumstances, the conveyor cannot retain a direct or indirect interest in the prescribed property after it is conveyed by being a shareholder of the company or by being a beneficiary of the trust receiving the property. This is because where the conveyee is a company or a trustee of a trust, the respective shareholders or beneficiaries must all be natural person family members of the conveyor (or the conveyor’s shareholders or beneficiaries). In addition, the shareholders of the conveyee company cannot hold those shares on trust. Similarly, where the conveyee is a trust, the trust deed must include clauses (that cannot be amended) providing that only family members of the conveyor can be beneficiaries of the trust and that no beneficiary may be a beneficiary in the capacity of trustee of another trust.

New section 8E(2B) provides the circumstances when the exemption in new section 8E(2) will apply if the conveyance of prescribed property is from a company that is not a trustee company (the "conveyor company").

As a result of these circumstances, the shareholders of the conveyor company and, where applicable, the beneficiaries of the conveyee trust and the shareholders of the conveyee company must all be natural person family members. This, together with the fact that if the conveyee is a company that the shareholders cannot hold the shares on trust, means that the conveyor company cannot retain a direct or indirect interest in the prescribed property after it is conveyed. Similarly, no shareholder of the conveyor company can be a beneficiary or shareholder of the conveyee company or trust.

New section 8E(2C) provides the circumstances when the exemption in new section 8E(2) will apply if the conveyance of prescribed property is from a trustee of a trust (the "conveyor trust").

As a result of these circumstances, the beneficiaries of the conveyor trust and, where applicable, the beneficiaries of the conveyee trust and the shareholders of the conveyee company must all be natural person family members. This means that the trustee of the conveyor trust cannot retain a direct or indirect interest in the prescribed property. Similarly, no beneficiary of the conveyor trust can be a beneficiary or shareholder of the conveyee company or trust.

Subclause (6) omits section 8E(3)(a) and (b) of the Stamp Duty Act as a consequence of subclause (5). Subclause (6) also substitutes a new paragraph (a), which provides that the exemption will not apply if the Commissioner is satisfied that the conveyance has the principal purpose of taking advantage of the exemption.

Subclause (7) clarifies that the conveyee or conveyees must intend to use the prescribed property solely or principally for farming purposes.

Subclause (8) makes a consequential amendment to section 8E(4) of the Stamp Duty Act as a result of subclause (5) and also ensures that section 8E(4) applies where there is a conveyance of part of the same prescribed property. That section seeks to limit a possible avoidance opportunity of using a chain of otherwise exempt conveyances.

Clause 7. New section 11

This clause inserts a new section 11 entitled “Application of Act after 3 May 2005 to conveyance of family farming property” into the Stamp Duty Act. New section 11 provides that the amendments to section 8E effected by the Bill (ie in respect of the ‘family farm’ exemption) only apply to instruments executed on or after 3 May 2005.

PART 4 – AMENDMENT RELATING TO ABOLITION OF STAMP DUTY ON ELECTRONIC DEBIT TRANSACTIONS

Clause 8. Amendment of Schedule 1

This clause makes a consequential amendment to Schedule 1 to the Stamp Duty Act by omitting item 3B as a result of clause 7 of the Taxation (Administration) Amendment Bill 2005 abolishing duty on electronic debit transactions. Accordingly, item 3B is no longer required as it specifies the rate of duty on liable debit transactions.

PART 5 – AMENDMENT RELATING TO EXTENSION OF EXEMPTION FROM STAMP DUTY ON VETERANS' MOTOR VEHICLE CERTIFICATES OF REGISTRATION

Clause 9. Amendment of Schedule 2

This clause extends the existing stamp duty exemption in item 37(m) of Schedule 2 to the Stamp Duty Act, for the registration or transfer of motor vehicle certificates of registration to totally and permanently incapacitated war veterans, by including extreme disabled adjustment war veterans.

PART 6 – OTHER AMENDMENTS

Clause 10. New Part 1 heading

This clause inserts a new Part heading entitled “PART 1 – PRELIMINARY MATTERS” before section 1 of the Stamp Duty Act.

Clause 11. New Part 2 heading

This clause inserts a new Part heading entitled “PART 2 – STAMP DUTY PROVISIONS” after section 3 of the Stamp Duty Act.

Clause 12. New Part 3 heading

This clause inserts a new Part heading entitled “PART 3 – MISCELLANEOUS MATTERS” after section 8H of the Stamp Duty Act.

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