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Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.*
Overview of Bill
The object of this Bill is to make miscellaneous amendments to certain State
revenue Acts and other legislation, in particular, the Business Franchise
Licences (Petroleum Products) Act 1987, the Business Franchise Licences
(Tobacco) Act 1987, the Debits Tax Act 1990, the Land Tax Management Act
1956, the Pay-roll Tax Act 1971, the Recovery of Imposts Act 1963 and the
Stamp Duties Act 1920. The Bill also amends certain regulations under those
Acts.
* Amended in committee--see table at end of volume.
Clause 2 provides for the commencement of the proposed Act on 1 January
1996, except as otherwise provided. Alternative commencement dates are
mentioned below in relation to each of the amendments concerned.
Clauses 310 are formal provisions giving effect to the Schedules of
amendments.
Schedules 18 amend the Acts and regulations referred to above.
Schedule 1
Amendment of Business Franchise Licences
(Petroleum Products) Act 1987
Transfer of procedural matters relating to the off-road diesel
fuel scheme into the Act from the regulations
The Business Franchise Licences (Petroleum Products) Act 1987 contains
provisions providing for an off-road diesel fuel scheme. Those provisions are
augmented by provisions of the regulations under that Act. The proposed
Act transfers those provisions from the regulations into the Act. See
Schedule 1 [ 1][6] and [ 14].
Transfer of procedural matters in relation to appeals into the
Act from the regulations
The Business Franchise Licences (Petroleum Products) Act 1987 contains
provisions enabling appeals to be made against decisions on objections to
the granting of licences under that Act. Those provisions are augmented by
provisions of the regulations under that Act. The regulations also specify the
rate of interest payable on amounts that are refunded to an objector as a
result of an appeal, provide for the rounding-off of interest and provide for
the payment of expenses of persons who are required to attend hearings
conducted in connection with investigations being carried out under that Act.
The proposed Act transfers those provisions from the regulations into the
Act. See Schedule 1 [7][ 13].
Explanatory note page 2
Schedule 2
Amendment of Business Franchise Licences
(Tobacco) Act 1987
Transfer of procedural matters in relation to appeals into the
Act from the regulations
The Business Franchise Licences (Tobacco) Act 1987 contains provisions
enabling appeals to be made against decisions on objections to the granting
of licences under that Act. Those provisions are augmented by provisions of
the regulations under that Act. The regulations also specify the rate of
interest payable on amounts that are refunded to an objector as a result of an
appeal, provide for the rounding-off of interest and provide for the payment
of expenses of persons who are required to attend hearings conducted in
connection with investigations being carried out under that Act. The
proposed Act transfers those provisions from the regulations into the Act.
See Schedule 2 [1][7].
Disclosure of information obtained under the Business
Franchise Licences (Tobacco) Act 1987 to the
Director-General of the Department of Health
The Business Franchise Licences (Tobacco) Act 1987 prohibits the
disclosure of certain information, subject to specified exceptions. The
proposed Act adds to those exceptions so as to permit information to be
disclosed to the Director-General of the Department of Health for the
purposes of facilitating the administration of the Public Health Act 1991 and
the Tobacco Advertising Prohibition Act 1991. See Schedule 2 [8][ 10].
Schedule 3
Amendment of Debits Tax Act 1990
Tax exemptions for bodies associated with the year 2000
Olympic Games
The proposed Act exempts the Sydney Organising Committee for the
Olympic Games and Sydney Paralympic Organising' Committee Limited
from the requirement to pay debits tax under the Debits Tax Act 1990. See
Schedule 3 [ l ] .
Tax exemptions for companies with regional headquarters
within New South Wales
The proposed Act removes a current tax exemption in relation to companies
that have regional headquarters within New South Wales. See Schedule
3 [2].
Explanatory note page 3
State Revenue Legislation Further Amendment Bill 1995 [Act 1995 No 98]
Explanatory note
Notional separation of debits for debits tax purposes
The proposed Act provides for a single debit with respect to multiple
transactions effected by a single third party cheque arrangement to be treated
as multiple debits for debits tax purposes under the Debits Tax Act 1990. The
new section replaces an existing section that contains more general
provisions with respect to multiple transactions. See Schedule 3 [3].
Imposition of tax on persons and bodies having Crown
immunity
The proposed Act enables the Governor to apply the whole or any specified
provisions of the Debits Tax Act 1990 to any specified body (whether
statutory or otherwise) that has Crown immunity. See Schedule 3 [4].
Schedule 4
Amendment of Land Tax Management Act
1956
Exemption of State owned corporations from land tax in
limited circumstances
The proposed Act enables regulations under the Land Tax Management Act
I956 to exclude State owned corporations from land tax liability in the same
way as electricity and gas distributors can be excluded. See Schedule 4 [l].
Imposition of tax on persons and bodies having Crown
immunity
The proposed Act enables the Governor to apply the whole or any specified
provisions of the Land Tax Management Act 1956 to any specified body
(whether statutory or otherwise) that has Crown immunity. A consequential
provision exempts lessees of lands held by the Crown from payment of land
tax in circumstances in which the Crown body from which the land is leased
is liable for land tax. See Schedule 4 [2] and [3].
Schedule 5
Amendment of Pay-roll Tax Act 1971
Disclosure of pay-roll tax information to the WorkCover
Authority
The Pay-roll Tax Act 1971 prohibits the disclosure of certain information,
subject to specified exceptions. The proposed Act adds to those exceptions
so as to permit information to be disclosed to the Workcover Authority so as
to enable that Authority to exercise its functions. See Schedule 5 [l], [2]
and [3].
Explanatory note page 4
Correction of formulae
The proposed Act corrects typographical errors in a formula used in
connection with the calculation of pay-roll tax. See Schedule 5 [4] and [5].
The amendments are taken to have commenced on 1 January 1995.
Schedule 6
Amendment of Recovery of Imposts
Act 1963
Recovery of imposts
The proposed Act overcomes the decision of the High Court in
Commissioner of State Revenue v Royal Insurance (1994) 126 ALR 1. In
that case, the High Court considered the effect of section 20A of the
Limitation Act 1958 (Vic). That provision was, before its amendment in
1993, in similar terms to the present version of section 2 of the Recovery of
Imposts Act 1963. Section 2 of the Recovery of Imposts Act 1963 presently
creates limitation periods in respect of proceedings against the Crown and its
various agents to recover taxes paid "under the authority or purported
authority of any Act". The decision in Royal Insurance suggests that the
words "under the authority or purported authority of any Act" do not apply
to mistaken payments resulting from a misreading of a statute. See
Schedule 6.
Schedule 7
Amendment of Stamp Duties Act 1920
Recognition of CUFS as a species of share
Interests known as CHESS Units in Foreign Securities ("CUFS" for short)
are used to settle transactions relating to foreign shares and units in public
unit trust schemes that are traded on the Australian stock exchange. The
proposed Act recognises CUFS as a species of share for the purposes of
various provisions of the Stamp Duties Act 1920. See Schedule 7 [l], [2],
[13], [15], [16], [17] and [34].
Licences to sell duty stamps
The proposed Act removes the requirement under the Stamp Duties Act 1920
that stamps be sold at specially licensed premises only and that a sign be
displayed at the premises showing the licensee's name and the words
"Licensed to sell duty stamps". A Variation of Statute approved by the
Treasurer dispensed with these requirements on 4 January 1995. See
Schedule 7 [3], [4] and [5]. The amendments are taken to have commenced
on 4 January 1995.
Explanatory note page 5
Prohibition of "contract splitting" to avoid stamp duty
The proposed Act extends the provisions of the Stamp Duties Act 1920 that
give rise to a presumption that different interests in the same property that
are conveyed between the same parties within 12 months of each other are a
single transaction for stamp duty purposes to conveyances in which the
parties are not the same but are related to the original parties. See
Schedule 7 [6].
Exclusion from oral contract provisions
Division 3A of Part 3 contains provisions dealing with "Clayton's
contracts", ie provisions for the payment of duty where dutiable instruments
may not be involved. Section 44 (3) deals with the transactions to which
Division 3A does not apply. The proposed Act restores this provision to the
form in which it was prior to its amendment by the State Revenue
Legislation (Amendment) Act 1994, and preserves the effect of a regulation
made in relation to that provision. See Schedule 7 [7] and [47] (proposed
clause 42 in Part 13 of the Tenth Schedule). The amendments are taken to
have commenced on 1 September 1994.
lntergenerational transfers of rural land
Section 66H of the Stamp Duties Act 1920 provides an exemption from duty
on the intergenerational transfer of rural land, subject to certain criteria being
satisfied. The proposed Act extends this exemption to other property integral
to primary production and transferred with the land. See Schedule 7 [8]. The
amendments are taken to have commenced on 14 September 1994.
Transfer of functions from the Treasurer to the Chief
Commissioner of Stamp Duties
The proposed Act amends the Stamp Duties Act 1920 so as to enable certain
functions of the Treasurer to be exercised by the Chief Commissioner of
Stamp Duties. A right of appeal is conferred elsewhere in this Schedule of
amendments in relation to decisions of the Chief Commissioner under the
provisions as proposed to be amended. The functions relate to the granting
of exemptions from duty in connection with intergenerational transfer of
rural land, charitable institutions, and transfer of property between members
of a group of corporations. See Schedule 7 [9] and [35][38].
Explanatory note page 6
Definition of loan security
The proposed Act extends the same exemption from loan security duty under
the Stamp Duties Act 1920 to certain instruments connected with options
trading as applies to similar instruments in the money market. See
Schedule 7 [10]. The amendments are taken to have commenced on
1 January 1989.
Exemptions from loan security duty for transactions between
1.1.95 and 1.1.96
Section 84CAC of the Stamp Duties Act 1920 contains an exemption for
home loan refinancing that expired on 1 January 1995. Variations of Statute
were approved by the Treasurer to extend this date to 30 June 1995 and then
to 3 1 December 1995. The proposed Act extends the date to 1 January 1996,
so that advances for home loan refinancing made before this date will be
eligible for the exemption. See Schedule 7 [ 11 ]. The amendments are taken
to have commenced on 1 January 1995.
Exemptions from loan security duty for certain companies
Section 84EBA of the Stamp Duties Act 1920 provides that duty is not
chargeable in respect of a loan security payable by a company that
established its regional headquarters in the State after 1 July 1995 and that is
the subject of a determination made under section 82CE of the Income Tax
Assessment Act 1936 of the Commonwealth. The proposed Act terminates
the operation of section 84EBA from 1 September 1995, except as regards
any such determination made before that date. The exemption expires on 1
July 2000. The amendment does not prevent a non-statutory scheme from
operating in a similar fashion. See Schedule 7 [ 12]. The amendments are
taken to have commenced on 1 September 1995.
Exemption from stamp duty on SCH-regulated share transfers
effected by mortgage or discharge of mortgage
Section 94C (2) of the Stamp Duties Act 1920 exempts certain
SCH-regulated transfers from payment of duty under Division 26A of Part 3
of that Act. The proposed Act extends those exemptions to include share
transfers effected by mortgage or discharge of mortgage where the
instrument concerned has been duly stamped, or is exempt from similar duty,
under the law of another State or Territory. See Schedule 7 [14]. The
amendments are taken to have commenced on 27 January 1995.
Explanatory note page 7
Declarations of trust transferring mortgages and corporate
debt securities
Section 97AE of the Stamp Duties Act I920 and paragraph (4 1 ) of the
General Exemptions in the Second Schedule to that Act exempt transfers of
mortgages and corporate debt securities from duty. The amendments extend
this exemption to declarations of trust over mortgages and corporate debt
securities. The amendments are effective from 1 January 1995, when a
Variation of Statute for this purpose came into effect. See Schedule 7 [ 18]
and [40].
Clarification of financial institutions duty provisions
The proposed Act amends the Stamp Duties Act 1920 to clarify the
definition of broker receipts, and to clarify the extent of the exemption for
certain involuntary transfers. See Schedule 7 [19] and [24].
Anti-avoidance provisions in relation to financial institutions
duty
The proposed Act amends the Stamp Duties Act 1920 so as to close a
loop-hole in relation to the payment of financial institutions duty on funds
transferred outside New South Wales and so as to clarify and restrict the
definitions relating to short term dealings. See Schedule 7 [20], [21], [23]
and [26] and 8.3 [5].
Transfers between exempt accounts
The proposed Act amends the Stamp Duties Act 1920 to confirm that
transfers between exempt accounts, which are used as working accounts of
non-bank financial institutions, are not subject to financial institutions duty.
See Schedule 7 [22].
Exemption of SEISIN clearing transactions from financial
institutions duty
Section 98A of the Stamp Duties Act 1920 excludes certain transactions
from liability for financial institutions duty. The proposed Act extends this
exclusion to transactions effected for the purposes of the Solicitors'
Electronic
Information
Settlement
Interchange
Network.
See
Schedule 7 [25]
Explanatory note page 8
Prescribed short term dealers
The proposed Act amends the Stamp Duties Act 1920 to allow the Chief
Commissioner to assess duty on breaches of the conditions attached to a
prescribed short term dealer's account, and to cancel an exempt account if
conditions or undertakings are breached. See Schedule 7 [27], [28] and [29].
Imposition of tax on persons and bodies having Crown
immunity
The proposed Act enables the Governor to apply the whole or any specified
provisions of the Stamp Duties Act 1920 to any specified body (whether
statutory or otherwise) that has Crown immunity. A consequential provision
provides that accounts held by Crown bodies the subject of such an order
will not be eligible for a certificate of approval as an exempt account under
section 98U of the Stamp Duties Act 1920 on the ground that they are
Crown bodies. See Schedule 7 [30] and [33].
Rights of objection against decisions of the Chief
Commissioner of Stamp Duties
The amendments confer a right of objection and appeal in connection with
decisions of the Chief Commissioner under provisions previously
administered by the Treasurer. See Schedule 7 [3 l] and [32].
Community Housing Program instruments
The proposed Act exempts instruments from liability for stamp duty if they
are executed for the purposes of or in connection with the Community
Housing Program administered within the Department of Housing. See
Schedule 7 [39].
Share ratio contracts
The proposed Act exempts share ratio contracts from liability for stamp duty.
See Schedule 7 [41]. The amendments are taken to have commenced on 3
March 1995.
HomeFund deeds of release
The proposed Act exempts deeds of release effected under the HomeFund
Restructuring Act 1993 from liability for stamp duty. See Schedule 7 [42].
The amendments are taken to have commenced on 15 September 1995.
Explanatory note page 9
Lawyers' costs agreements
The proposed Act exempts from duty costs agreements required to be
entered into under the Legal Profession Act 1987 between lawyers and their
clients or other lawyers. Variations of Statute were approved by the
Treasurer on 4 October 1994 and 6 January 1995. See Schedule 7 [43]. The
amendments are taken to have commenced on 4 October 1994.
Conveyances to solicitor corporations
The proposed Act exempts conveyances to solicitor corporations from
liability for stamp duty in respect of the property of firms of solicitors
established before 8 March 1991. See Schedule 7 [44]. The amendments are
taken to have commenced on 17 February 1995.
Agreements funding certain employment or training programs
The proposed Act exempts from duty any agreement relating to the funding
or employment or training programs by the Department of Training and
Education Co-ordination. This was the subject of a Variation of Statute
approved by the Treasurer on 6 March 1995. The amendment operates from
this date. See Schedule 7 [45].
Tax exemptions for bodies associated with the year 2000
Olympic Games
The proposed Act exempts the Sydney Organising Committee for the
Olympic Games and Sydney Paralympic Organising Committee Limited
from the requirement to pay financial institutions duty under the Stamp
Duties Act 1920 (Schedule 8.3 [5]--proposed clause 37 (1) of the Stamp
Duties Regulation 1991). The proposed Bill also exempts the Australian
Olympic Committee Incorporated or the New South Wales Olympic Council
Incorporated from financial institutions duty in respect of accounts used
solely for the purpose of receipts in connection with the year 2000 Olympic
Games (but not in connection with the administrative or operating costs of
either account-holder) (Schedule 8.3 [5]--proposed clause 37 (2) of the
Stamp Duties Regulation 1991 ).
Explanatory note page 10