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This is a Bill, not an Act. For current law, see the Acts databases.
South Australia
Stamp Duties (Partnership Interests) Amendment
Bill 2010
A BILL FOR
An Act to amend the Stamp Duties Act 1923.
Contents
Part 1—Preliminary
1 Short
title
2 Amendment provisions
Part 2—Amendment of Stamp Duties
Act 1923
3 Insertion of section
71AB
71AB Partnership interests
4 Amendment of
section 71E—Transactions otherwise than by dutiable
instrument
5 Amendment of section 91—Interpretation
6 Amendment of
section 95—General principle of liability to duty
Schedule 1—Transitional
provision
1 Transitional provision
The Parliament of South Australia enacts as
follows:
This Act may be cited as the Stamp Duties (Partnership Interests)
Amendment Act 2010.
In this Act, a provision under a heading referring to the amendment of a
specified Act amends the Act so specified.
Part 2—Amendment
of Stamp Duties
Act 1923
After section 71A insert:
71AB—Partnership interests
(1) This section applies to an instrument effecting or acknowledging,
evidencing or recording 1 or more of the following:
(a) the transfer, divesting, dilution, satisfaction, realisation or
extinguishment of an interest within the ambit of subsection (2) (including
on account of a retirement from a partnership or the dissolution of a
partnership);
(b) the conversion of an interest within the ambit of subsection (2)
to an entitlement to the payment of money, the distribution of assets, or the
provision of any other benefit or consideration;
(c) the acquisition of an interest within the ambit of
subsection (2),
(and any such transfer, divesting, dilution, satisfaction, realisation,
extinguishment, conversion or acquisition will be referred to as a "prescribed
transaction" for the purposes of this section).
(2) An interest is within the ambit of this subsection if it consists of,
or is constituted by, the interest of a person in the assets (or any part of the
assets) of a partnership as partner (or former partner) in a partnership,
however that interest may be defined or constituted, including—
(a) an interest held individually or collectively;
(b) an interest consisting of a right to a proportion of the surplus
property of the partnership after the realisation of assets and the payment,
satisfaction or discharge of debts and liabilities.
(3) Subsections (1) and (2) apply whether or not the interest to
which the instrument relates consists of, or is constituted by, an equitable
chose in action which is being satisfied, realised or extinguished without
effecting a dealing with the assets of the partnership or a change in the
ownership of an equitable interest in the partnership.
(4) An instrument to which this section applies is taken to be a
conveyance of property operating as a voluntary disposition
inter vivos (whether or not consideration is provided between the
parties to the instrument).
(5) For the purpose of calculating ad valorem duty payable on
an instrument to which this section applies, the value of the interest to which
the instrument relates will be taken to be—
(a) unless paragraph (b) applies—any consideration or other
amount or value payable, given or provided on account of the prescribed
transaction with respect to the interest under subsections (1)
and (2); or
(b) if the Commissioner considers that the consideration or other amount
or value under paragraph (a) does not represent the full value of the
interest with respect to the assets of the partnership (including the interest
contemplated by subsection (3)), or if there is no consideration or other
amount or value payable, given or provided—the value of the interest in
the partnership of the person referred to in subsection (2) before the
prescribed transaction, less any value of the interest (if any) in the
partnership of that person after the prescribed transaction.
(6) For the purposes of subsection (5)(b) (and subject to applying
the principles set out in subsections (7) and (8)), the value of an
interest in a partnership will be determined as follows:
where—
V is the value
TV is the total value of the assets of the
partnership
P is a fraction representing the proportionate interest of
the person referred to in subsection (2).
(7) For the purposes of subsections (5) and (6)—
(a) the value of any land will be the unencumbered market value of the
land at the date of the relevant prescribed transaction; and
(b) the value of other assets will be determined according to the net
value of the assets (which cannot be a negative value for the purposes of this
paragraph); and
(c) the proportionate interest of a person as a partner will be
represented by the greater of the following:
(i) the relative entitlement of the partner to participate in the surplus
property of the partnership after the realisation of assets and the payment,
satisfaction or discharge of debts and liabilities;
(ii) the relative capital contribution of the partner (being equity and,
subject to subsection (9), any loan capital).
(8) In connection with the operation of subsection (7), any charge
over both land and other assets of a partnership will be apportioned to the
various assets to which the charge relates according to the relative values of
the assets (and then the relevant portion may be applied to the assets other
than land to determine a net value under subsection (7)(b)).
(9) Loan capital will be taken into account for the purposes of
subsection (7)(c)(ii) unless the Commissioner is satisfied that the loan
was entered into as part of a genuine business arrangement and not as part of an
arrangement to avoid or reduce duty under this section.
(10) For the purposes of this section (and for the calculation of the
value of any assets), the goodwill of a business conducted by a partnership, or
in which a partnership has an interest, will be taken to form an asset of the
partnership (including on a proportionate basis if the partnership has a
proportionate interest).
(11) If an instrument of a kind referred to in subsection (1) is duly
stamped under this Act, any other instrument of a kind referred to in that
subsection that the Commissioner is satisfied relates to the same transaction
will be exempt from duty to the extent necessary to avoid the imposition of
double duty.
(12) This section does not limit the operation of any other section which
provides for the imposition of ad valorem duty with respect to the
conveyance of property (but not so as to impose double duty of corresponding
amounts under 2 or more sections).
(13) This section applies both prospectively and
retrospectively.
4—Amendment of
section 71E—Transactions otherwise than by dutiable
instrument
Section 71E—after subsection (9) insert:
(10) A reference in this section to a transaction that results in a change
in the ownership of an interest in a partnership will be taken to include a
prescribed transaction with respect to an interest within the meaning of
section 71AB (recognising that, for the purposes of this section, the
relevant transaction will not be effected by an instrument on which
ad valorem duty is chargeable) and, in the case of such a
transaction, the duty payable on a statement under this section will be the same
as the duty that would be payable if the transaction were effected by an
instrument under section 71AB(1).
(11) Subsection (10) applies both prospectively and
retrospectively.
5—Amendment of
section 91—Interpretation
Section 91—after subsection (3) insert:
(3a) A private entity or other person that is a partner in a partnership
is to be regarded, for the purposes of this Part, as beneficially entitled to a
proportionate share in each and every asset of the partnership.
(3b) For the purposes of subsection (3a), a proportionate share of a
partner will be represented by the greater of the following:
(a) the relative entitlement of the partner to participate in the surplus
property of the partnership after the realisation of assets and the payment,
satisfaction or discharge of debts and liabilities;
(b) the relative capital contribution of the partner (being equity and,
subject to subsection (3c), any loan capital).
(3c) Loan capital will be taken into account for the purposes of
subsection (3b)(b) unless the Commissioner is satisfied that the loan was
entered into as part of a genuine business arrangement and not as part of an
arrangement to avoid or reduce duty under this Part.
(3d) Subsections (3a) and (3b) do not limit the operation of
section 71AB (but not so as to impose double duty with respect to the same
transaction).
(3e) Subsections (3a) to (3d) (inclusive) apply both
prospectively and retrospectively.
6—Amendment of
section 95—General principle of liability to
duty
Section 95(4)—after paragraph (c) insert:
or
(d) the addition or retirement of a partner in a partnership with assets
comprising shares in a company or units in a unit trust scheme.
Schedule
1—Transitional provision
(1) The Commissioner of State Taxation may, on account of (and in
accordance with) the amendments made to the Stamp Duties Act 1923 by
this Act, reassess duty with respect to any instrument or transaction created or
entered into before the commencement of this Act.
(2) However—
(a) the Commissioner of State Taxation may not impose any penalty on a
retrospective basis with respect to the reassessment of duty under this clause;
and
(b) this measure does not affect any liability to duty in respect of the
Deed that was the subject of proceedings before the Full Court in Supreme Court
Action No 320 of 2008.