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State Revenue Legislation
(Miscellaneous Amendments) Bill
1996
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
(a)
to amend the Stamp Duties Act 1920 to make further provision with
respect to exemptions and concessions applying to duty payable under
that Act, the duty payable in respect of hiring arrangements and loan
refinancing securities and other matters, and
(b)
to amend the Debits Tax Act 1990 to provide f o r certain exemptions
from tax payable under that Act, and
(c)
to amend the Pay-roll Tax Act 1971:
(i)
in relation to the tax payable under that Act in respect of wages
earned in coastal waters, and
(ii)
with respect to the prevention of double taxation, and
(iii) in relation to the tax payable in respect of superannuation
benefits, and
to amend the Land Tax Act 1956 to extend the operation of certain
provisions relating to flood liable land to land that the Chief
Commissioner of Land Tax considers unsuitable for building, and to
amend the Land Tax Management Act 1956 in relation to the
exemption available in respect of a principal place of residence, and
to amend the Revenue Laws (Reciprocal Powers) Act 1987 by way of
statute law revision, and
to amend the State Revenue Legislation Further Amendment Act 1995
in relation to the date on which an amendment made by that Act is to
have taken effect, and
to amend the State Revenue Legislation Further Amendment Act 1996
as a consequence of amendments made to the Pay-roll Tax Act 1971.
Clause 2 provides for the commencement of the proposed Act.
Clause 3 is a formal provision giving effect to the amendments to the Stamp
Duties Act 1920 set out in Schedule 1.
Clause 4 is a formal provision giving effect to the amendments to the Debits
Tax Act 1990 set out in Schedule 2.
Clause 5 is a formal provision giving effect to the amendments to the
Pay-roll Tax Act 1971 set out in Schedule 3.
Clause 6 is a formal provision giving effect to the amendments to the Land
Tax Act 1956 and the Land Tax Management Act 1956 set out in Schedule 4.
Clause 7 is a formal provision giving effect to the amendments to the
Revenue Laws (Reciprocal Powers) Act 1987 set out in Schedule 5.
Clause 8 is a formal provision giving effect to the amendment to the State
Revenue Legislation Further Amendment Act 1995 set out in Schedule 6.
Clause 9 is a formal provision giving effect to the amendment to the State
Revenue Legislation Further Amendment Act 1996 set out in Schedule 7. The
amendment is made as a consequence of the amendments made by
Schedule 3.
Explanatory note page 2
Schedule 1
Amendment of Stamp Duties Act 1920
Payment of duty by return
Section 38C currently permits duty to be paid under the Act periodically
according to a system of returns furnished by approved duty-payers who are
themselves responsible for stamping dutiable instruments. Schedule l [ l ]
amends the section to provide for an alternative method of implementing the
scheme using computer-stored record systems.
Share transfers not evidenced by a dutiable instrument
Section 44A of the Act levies duty on certain transactions not evidenced by a
dutiable instrument. In the case of a transfer of shares or share rights, duty is
payable when the shares or rights are transferred for full value. Schedule
1 [2] amends the section so that duty is payable even when the shares or
rights are transferred for no consideration or less than full consideration.
Exemptions from stamp duty
Share transfers to third parties following dissolution of marriage or other
relationship
Section 74CB of the Act exempts from duty instruments that are executed in
pursuance of an order under the Family Law Act 1975 of the Commonwealth
or the De Facto Relationships Act 1984 settling property on the parties to the
marriage or relationship. Schedule l [ 3 ] amends the section so that the
exemption extends to apply to a share transfer to a third party in order to
comply with a requirement of the Corporations Law (for example, a
requirement that there be at least two shareholders in a company) and to a
declaration of trust in favour of the transferor or the other party to the
marriage or relationship.
Conveyances of property to trustees or custodians of superannuation funds or
trusts
Schedule 1 [13] and [14] amend sections 82AA and 82AB of the Act to
provide that certain conveyances effected for the better management of
superannuation funds are exempt from stamp duty. Duty would ordinarily be
payable when the property of a superannuation fund is transferred to a
managed trust in exchange for trust units, resulting in a transfer of beneficial
.ownership of the property concerned. The amendment provides that in these
circumstances the ownership of the property is to be treated as unchanged.
Explanatory note page 3
Duty on hiring arrangements
Section 74D defines Equipment financing arrangement for the purposes of
a duty reduction afforded by section 74F. Schedule 1 [4]-[8] amend section
74D to make it clear that:
(a)
the expression includes an arrangement under a hire-purchase
agreement for any term, and
(b)
floor plan bailments are not dutiable as hiring arrangements, and
(c)
in so far as the expression includes an arrangement under an agreement
that is not a hire-purchase agreement but is a hiring agreement for a
term of at least 9 months, an agreement is taken to be for a term of less
than 9 months unless it is so worded that it cannot be terminated by the
hirer sooner than 9 months after its commencement (otherwise than by
a full payout of the contracted price or by a refinancing) without
substantial penalty, and
(d) refinancing of a hiring arrangement does not include a refinancing
only of the residual payment due under the arrangement.
Schedule 1 [9]-[12] amend section 74F to make it clear that the provisions of
section 74F (7A) apply only to amounts received and duty payable, and
require returns to be lodged, in relation to hiring arrangements other than
equipment financing arrangements.
Refinancing loan securities
Schedule 1 [15] repeals and substitutes section 84CAA, which affords
concessions with respect to stamp duty on loan securities in the case of a loan
security that is for refinancing only. The purpose of the re-enactment is to
make it clear that:
(a)
to obtain the concession, it is not necessary for the borrower to be
named in the loan security, and
(b)
only one loan security document (or one per lender, in a case where
refinancing involves more than one lender) is capable of exemption
from duty under the section in respect of any particular transaction,
any collateral instruments being liable to duty at the usual nominal
rate, and
(c)
the benefit of the concession is available even where a loan is
refinanced by several lenders, in which case that benefit is apportioned
between them.
Explanatory note page 4
Exemptions from financial institutions duty
Charitable trusts
Schedule 1 [21] amends the definition of charitable organisation in section
98 (1) so as to provide for the exemption from financial institutions duty of
trusts established for charitable purposes.
Transfer of engagements of credit unions
A "transfer of engagement" is said to occur when, as a result of
amalgamation of credit unions, members of a defunct credit union
automatically become members of another credit union, resulting in a transfer
of accounts. Schedule 1 [22] and [23] amend section 98A to provide for the
exemption of credit union receipts from financial institutions duty on the
account transfer. The exemption is similar to existing exemptions in relation
to transfers of accounts as a result of amalgamation of other financial
institutions.
IATA accounts
Schedule 1 [25] amends section 98U to provide for the exemption from
financial institutions duty of the account held by International Air Transport
Association for the clearing and settlement of funds between agents and
airline principals.
Stock exchange clearing and settlement accounts
Schedule l [26] amends section 98U to provide for the exemption from
financial institutions duty of the account held by ASX Settlement and
Transfer Corporation Pty Limited (a company controlled by the Australian
Stock Exchange) for clearing and settlement.
Fund operated by electricity authority
Schedule 1 [27] amends section 98U to provide for the exemption from
financial institutions duty of the Market Settlements Fund operated by the
New South Wales Electricity Transmission Authority for the purposes of the
Electricity Supply Act 1995.
Exemptions from marketable securities duty
Off-market trading of instalment receipts
Schedule l [16], [18]-[20], [28] and [29] amend various provisions of the
Act in order that stamp duty on instalment receipts (such as those issued by
the Commonwealth Bank) will be payable in the Australian jurisdiction in
which the issuing company was incorporated.
Explanatory note page 5
Benchmark All Ordinaries Trust
Schedule l [30] amends the Second Schedule to the Act to provide for
exemption from marketable securities duty in respect of a transfer of shares
in exchange for units in Benchmark All Ordinaries Trust. Schedule l [17]
makes a consequential amendment.
Loan securities duty on advances made to retirement villages
Schedule
l [31] amends the Second Schedule to the Act to provide a general
exemption from loan securities duty in respect of a debenture granted, in
conjunction with a lease, by a non-profit organisation operating a retirement
village to a resident of the village.
Caveat over land subject to unpaid stamp duty
Schedule 1 [32] amends Schedule 2A to the Act to enable the Chief
Commissioner of Stamp Duties to lodge a caveat with respect to a property
purchased under the First Home Purchase Scheme where instalments of duty
are more than 3 months in arrears. This will enable the Chief Commissioner
to collect the duty owing out of the proceeds of a sale of the property.
Minor amendments
Schedule l [24] makes a minor amendment by way of statute law revision.
Schedule l [33] and [34] amend the Tenth Schedule to the Act to provide for
savings and transitional provisions as a consequence of amendments made by
the proposed Act.
Schedule 2
Amendment of Debits Tax Act 1990
Exemption from debits tax
Schedule 2 [2] provides for an exemption from debits tax for the Australian
Olympic Committee Incorporated and the New South Wales Olympic
Council Incorporated.
Schedule 2 [3] provides for an
exemption from debits tax for the Market
Settlements Fund operated by the New South Wales Electricity Transmission
Authority for the purposes of the Electricity Supply Act 1995.
Minor amendment
Schedule 2 [ l ] makes a minor amendment by way of statute law revision.
Explanatory note page 6
Schedule 3
Amendment of Pay-roll Tax Act 1971
Superannuation benefits
Schedule 3 [l] and [3] amend the definition section of the Act to simplify the
definition of superannuation benefit, at the same time making it clear that no
such benefit constitutes wages within the meaning of the Act unless it is paid
or payable in respect of services rendered by an employee on or before 30
June 1996.
Section 3AA (2) provides that the wages of persons contracted to serve the
Crown or employed on certain other contracts or as company directors,
insurance agents or in certain other occupations are taxable. Schedule 3 [2]
amends the definition section of the Act to provide that a superannuation
benefit provided to a person whose wages are subject to pay-roll tax under
section 3AA (2) of the Act is also subject to pay-roll tax.
Schedule 3 [10] inserts transitional provisions dealing with payments made
to a defined benefit superannuation scheme or an unfunded scheme that,
although made after 30 June 1996, are alleged to be made to make up a
deficiency in the relevant scheme in respect of services rendered by an
employee on or before that date. The provisions indicate the evidence the
Chief Commissioner will require an employer to keep in relation to such
payments, and enable provision to be made by regulation for determining the
of attribution of certain superannuation payments to employees and
for the apportionment of any such payment (as partly taxable and partly not)
in cases where the payment relates to an employee who rendered services
both before and after 30 June 1996. Schedule 3 [4] makes a consequential
amendment.
Double taxation
Schedule 3 [5] amends section 3AA of the Act (the section that defines
wages) to provide, for the avoidance of any doubt, that an amount paid or
payable by an employer that is characterised as wages by more than one
provision of the Act is nevertheless taxable once only.
Explanatory note page 7
Wages paid for off-shore work
Section 6 of the Act provides that, in general, wages paid in New South
Wales are taxable wages. An exception is made in the case of wages paid to
an employee who works "outside Australia" for a period of 6 months or
more. Schedule 3 [6] amends the section to vary the exception, which will
now apply only where the employee is working in another country.
Minor amendments
Schedule 3 [7] and [8] make minor amendments by way of statute law
revision.
Schedule 3 [9] amends Schedule 6 to the Act to provide for savings or
transitional provisions as a consequence of amendments made by the
proposed Act.
Schedule 4
Amendments relating to land tax
Flood liable land in the Land Tax Act 1956
Schedule 4.1 amends the definition of flood liable land (cast in terms of
unsuitability for building as determined by a local council) to include also
land that the Chief Commissioner determines is unsuitable for building.
Amendments to Land Tax Management Act 1956
Schedule 4.2 [ l ] inserts a definition of principal place of residence of a
person to make it clear that this concept, which is already used in the Act,
requires comparison of all the residences of the person worldwide rather than
just those in New South Wales.
Schedule 4.2 [2] and [3] amend section 10T under which land that is
intended to be a person's principal place of residence may qualify for
exemption as if it were already the person's principal place of residence. Item
[2] makes it clear that the relevant intention must be to occupy the land solely
for that purpose.
Item [3] adds to the disqualifications set out in section 10T, so that a person
will be disqualified if
(a)
the person has, in previous years, obtained an exemption in respect of
another parcel of land, or
Explanatory note page 8
(b)
the person, or another owner of the same land, is entitled to an
exemption in respect of other land that he or she actually uses as his or
her principal place of residence.
Schedule 5
Amendment of Revenue Laws
Powers) Act 1987
Schedule 5 amends the Revenue Laws (Reciprocal Powers) Act 1987 by way
of statute law revision, replacing references to repealed Acts.
Schedule 6
Amendment of State Revenue Legislation
Further Amendment Act 1995
Schedule 6 amends the State Revenue Legislation Further Amendment Act
1995 to vary the commencement date of an amendment made to the Stamp
Duties Act 1920 by that Act.
Schedule 7
Amendment of State Revenue Legislation
Further 'Amendment Act 1996
Schedule 7 amends the Act as a consequence of amendments made to the
Pay-roll Tax Act 1971 by Schedule 3.
Explanatory note page 9