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Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
Clause 2 provides for the commencement of the proposed Act on various
days as set out in the proposed section.
Clause 3 is a formal provision giving effect to the amendments to the Duties
Act 1997 set out in Schedule 1.
Clause 4 is a formal provision giving effect to the amendments to the Land
Tax Management Act 1956 set out in Schedule 2.
Clause 5 is a formal provision giving effect to the amendments to the
Petroleum Products Subsidy Act 1997 set out in Schedule 3.
Clause 6 is a formal provision giving effect to the amendments to the
Revenue Laws (Reciprocal Powers) Act 1987 set out in Schedule 4.
Clause 7 is a formal provision giving effect to the amendments to the Stamp
Duties Act 1920 set out in Schedule 5.
Clause 8 is a formal provision giving effect to the amendments to the
Taxation Administration Act 1996 set out in Schedule 6.
Schedule 1
Amendment of Duties Act 1997
Chapter 2
Transactions concerning dutiable property
ADRs
Amendments are made by Schedule 1 [l], [3], [12], [51] and [52] to ensure
that a change in the beneficial ownership of an ADR (American Depositary
Receipt) continues to be exempt from duty.
Instalment warrants
Instalment warrants providing beneficial ownership in respect of shares in a
NSW company are made dutiable property for the purposes of dutiable
transactions by amendments made by Schedule 1 [2], [3], [11], [24] and [52].
Ships and vessels
The disposition of a ship or vessel is exempted from duty by the amendment
made by Schedule 1 [4].
Partitions of property
Schedule 1 [5], [6] and [7] extend the concession that currently applies in
relation to a partition of dutiable property to include a partition of property,
some of which is dutiable property and some of which is not.
Explanatory note page 2
Index trusts
Schedule 1 [54] extends the exemption for the transfer of marketable
securities to or from the trustee of an index trust to Tower 20 Leaders Index
Trust.
Divorce settlements
Schedule 1 [13] extends the exemption for transfers of dutiable property as a
consequence of a divorce to transfers pursuant to private agreements that give
effect to a genuine divorce settlement, regardless of whether it is subject to an
order of the Family Court.
Transfer of principal place of residence from a corporation or special
trust to certain persons
Schedule 1 [14], [15] and [16] preserve a stamp duty concession for certain
transfers of principal places of residence by overcoming an unintended
consequence. for duty purposes. of amendments made to section 10 (1) (r) of
the Land Tax Management Act 1956 by Schedule 3 [4] to the State Revenue
Legislation Amendment Act 1997.
Chapter 3 Certain transactions treated as transfers
Profit a prendre
A profit a prendre is excluded, by Schedule 1 [17], from the types of land
holdings to which the "land-rich" provisions of the Duties Act 1997 applies.
Duty on relevant acquisitions
Duty on a relevant acquisition is reduced, by Schedule 1 [18], by an amount
of duty paid on the acquisition under other sections of the "land-rich"
provisions.
Exemptions
The exemption provisions are amended, by Schedule 1 [19], to ensure that,
while the specific acquisitions remain exempt, the interests acquired by an
exempt acquisition can still be considered in determining if a person has a
majority interest in the relevant corporation or unit trust.
Phasing-in of duty
Schedule 1 [20] amends the provision for the phasing-in of duty to deal with
a situation where, at one stage in an acquisition that is aggregated over 3
years. the unencumbered value of land holdings in New South Wales of the
private corporation was less than $1 million.
Explanatory note page 3
Subsidiaries of private corporations
Schedule 1 [21] treats a subsidiary of a private corporation as the owner of
land where the subsidiary is the vendor or purchaser under an uncompleted
agreement.
Double duty
Schedule 1 [22] avoids the possibility of double duty under Part 4
(Acquisition of land use entitlements by allotment of shares or issue of units)
of Chapter 3 and Part 5 (Allotment of shares by direction) of that Chapter.
Public unit trust schemes
Schedule 1 [57] widens the definition of public unit trust scheme in the
Dictionary to include schemes that will, in the opinion of the Chief
Commissioner, become public unit trust schemes within 12 months.
Chapter 4 Marketable securities--on-market transfers (Broker
provisions)
On-market transfers-when order received in New South Wales
Schedule 1 [23] specifies the circumstances in which a sale or purchase of
marketable securities quoted on the market operated by the Australian Stock
Exchange is, in the case of a reported trade, received in New South Wales.
Stock exchange transactions relating to companies incorporated in
New Zealand or Papua New Guinea
Schedule 1 [27] applies the concessional rate of duty to sales and purchases
of marketable securities of a body corporate incorporated under the law of
New Zealand or Papua New Guinea.
Records of sales, purchases and transfers of marketable securities
Schedule 1 [34] requires, in the case of a sale, purchase or transaction that is
dutiable at the concessional rate or that is exempt from duty, the keeping of
such particulars as are required to establish that the sale, purchase or
transaction is dutiable at a concessional rate or is exempt from duty.
Chapter 5 Lease instruments
Cost of a lease
Schedule 1 [35] makes it clear that rent paid in advance of a lease and an
amount paid or payable for the right to use land (as under a licence) comprise
part of the cost of a lease on which duty is chargeable.
Explanatory note page 4
Periodic estimates and assessments
Schedule 1 [36] makes it clear that a periodic estimate and a periodic
assessment of duty chargeable under a lease may be made more than 5 years
after the initial estimate. Inclusion of this provision will mean that the Chief
Commissioner will not be prevented (under section 9 (3) of the Taxation
Administration Act 1996) from making a reassessment of duty in such cases.
Chapter 6
Hire of goods
Goods used in New South Wales and outside New South Wales
Schedule 1 [37] recognises that goods, during the course of their hire, may
be used and subject to duty both in New South Wales and outside New South
Wales. To avoid double duty, the expression "during the course of hire" is
replaced with the expression "during any period for which a liability to duty
is required to be determined".
Special hiring agreements
Schedule 1 [38] provides that the duty on a special hiring agreement that is
chargeable with the maximum amount of duty of $10,000 cannot be reduced
below $6,000.
Chapter 7
Mortgages
Persons liable to duty
As not all instruments that come within the definition of mortgage in the
Duties Act 1997 have a party described as a "mortgagor", Schedule 1 [39]
adds a reference to the "person bound".
Liability to additional duty
Schedule 1 [40] removes an unintended limitation on the circumstances in
which a mortgage becomes liable to additional duty.
Effect of further advances
Schedule 1 [41] removes an expression that could have been wrongly
construed to mean that an original liability to duty of a mortgage could be
extinguished on the making of a further advance under the mortgage.
Collateral mortgages
Schedule 1 [42] clarifies the circumstances in which the duty on a collateral
mortgage is to be reduced.
Explanatory note page 5
First home purchase scheme
Schedule 1 [43] and [44] extend the concession in respect of eligible
mortgages under the First home purchase scheme to mortgages in support of
eligible mortgages.
Chapter 8 Insurance
Annuities
Schedule 1 [46] clarifies whether an annuity is insurance for the purposes of
the Duties Act 1997 by inserting a definition of annuity.
Chapter 9 Motor vehicle registration
Motor vehicles purchased by disabled veterans
Schedule 1 [47] exempts a motor vehicle certificate of registration from duty
if the motor vehicle is purchased by a totally and permanently incapacitated
veteran who is eligible for the special rate of pension under the
Commonwealth Veterans' Entitlements Act 1986.
Miscellaneous amendments to continue effect of provisions of
Stamp Duties Act 1920
Miscellaneous amendments are made for this purpose by Schedule 1 [8]
(nominal duties), Schedule 1 [9] (change in trustees) and Schedule 1 [10]
and [53] (transfer of property from one superannuation fund to another).
Minor amendments by way of clarification or Correction
Schedule 1 [25], [26], [28][33], [45], [48][50] and [56] make minor
amendments by way of clarification and correction.
Schedule 2 Amendment of Land Tax Management Act
1956
Schedule 2 [ l ] removes a provision that, as a consequence of the restoration
of a full exemption for all land owned, regardless of its use, by a charitable or
educational institution or a religious society (see Schedule 1 (4) (c) and (d) to
the Land Tax Management (Amendment) Act 1988) is now redundant.
Explanatory note page 6
Schedule 2 [2] removes a provision to make it clear that section 10A of the
Land Tax Management Act 1956, which enables an exemption granted to the
owner of a principal place of residence to continue for a period of not less
than 12 months after the death of the owner, applies in all cases.
Schedule 2 [3] removes the entitlement to an exemption in respect of land
acquired for the purpose of building a person's future principal place of
residence if the person owns and lives in a residence outside New South
Wales.
Schedule 3 Amendment of Petroleum Products Subsidy
Act 1997
Schedule 3 [1] and [7] clarify that the subsidies proposed to be granted under
the Petroleum Products Subsidy Act 1997 will be granted in respect of zones
identified by regulations made under the Act.
Schedule 3 [2] and [3] provide that a purchaser of marine diesel is entitled to
the benefit of a subsidy without the need for an off-road diesel permit.
Schedule 3 [4] removes the entitlement to a subsidy if the Commonwealth
pays a rebate which includes the State subsidy.
Schedule 3 [5] and [6] enable the Chief Commissioner to remit or reduce the
300% penalty imposed by the Petroleum Products Subsidy Act 1997 on a
person who claims a subsidy to which the person is not entitled.
Schedule 3 [8] provides for appeals to be made to the District Court pending
the establishment of the Administrative Decisions Tribunal.
Schedule 3 [9] enables, during a transitional period, the sale of petroleum
products by a registered wholesaler to an unregistered consumer provided
certain requirements are met.
Schedule 4 Amendment of Revenue Laws (Reciprocal
Powers) Act 1987
Schedule 4 provides that the Petroleum Products Subsidy Act 1997 is to be a
revenue law for the purposes of the Revenue Laws (Reciprocal Powers) Act
1987. This will, among other things, allow investigations to be carried out by
other Australian jurisdictions in New South Wales as to their petroleum
subsidy schemes.
Explanatory note page 7
Schedule 5 Amendment of Stamp Duties Act 1920
Schedule 5 [ l ] inserts a transitional provision that will apply to the
assessment of stamp duty on instruments on and from the commencement of
the Duties Act 1997 on 1 July 1998.
Schedule 5 [2], [4] and [11] provide that an exempt public sector
superannuation scheme is to be a complying superannuation fund for the
purposes of the Stamp Duties Act 1920. This will cause transfers of assets
between such funds to be subject to the concessional rate of stamp duty.
Schedule 5 [3] will cause instalment notes to be subject to stamp duty in the
same way as IRs.
Schedule 5 [5] removes double duty from certain novated motor vehicle
leases.
Schedule 5 [6] exempts a motor vehicle certificate of registration from duty
if the motor vehicle is purchased by a totally and permanently incapacitated
veteran who is eligible for the special rate of pension under the
Commonwealth Veterans' Entitlements Act 1986.
Schedule 5 [7] and [8] provide that the market value of a motor vehicle in
relation to which stamp duty on a certificate of registration is to be assessed
is not to include a notional amount of sales tax if the person who purchased
the vehicle was not liable to pay sales tax.
Schedule 5 [9] makes a minor amendment to the definition of options trader
to bring the definition into conformity with the Business Rules of the
Australian Stock Exchange.
Schedule 5 [10] applies the concessional rate of duty to sales and purchases
of marketable securities of a body corporate incorporated under the law of
New Zealand or Papua New Guinea.
Schedule 5 [12] exempts from financial institutions duty receipts of certain
accounts of organisations entitled to privileges and immunities under the
Commonwealth International Organisations (Privileges and Immunities) Act
1963.
Schedule 5 [13] extends the general exemption from stamp duty to certain
stock exchange index trusts.
Schedule 5 [14] grants a general exemption from stamp duty to compulsory
contracts under the Home Building Act 1989, certain instruments made for
Explanatory note page 8
the purposes of family agreements under the Medicare levy and under the
family tax assistance scheme of the Commonwealth and accommodation
bond agreements under the Commonwealth Aged Care Act 1997.
Schedule 5 [15] clarifies the application of certain transitional provisions to
the payment of premiums for policies of insurance.
Schedule 6
Amendment of Taxation Administration Act
1996
Schedule 6 [ l ] enables a reassessment of tax under a New South Wales
taxation law to be carried out more than 5 years after the initial assessment if
the carrying out of such a reassessment is specifically authorised by such a
law.
Schedule 6 [2] authorises the Chief Commissioner to refund an amount of
tax that has been overpaid, whether or not a notice of assessment has been
issued in respect of the tax.
Schedule 6 [3] enables the Chief Commissioner to refuse to exercise
functions under a taxation law if information or documents that are required
to be provided to the Chief Commissioner are not so provided.
Schedule 6 [4] and [5] make savings and transitional provisions that will be
required when the Stamp Duties Act 1920 becomes a taxation law to which
the Taxation Administration Act 1996 applies.
Explanatory note page 9