New South Wales Consolidated Acts

LAND TAX MANAGEMENT ACT 1956 - SECT 29

29 Related companies

(1) For the purposes of this section, 2 companies are related to each other:

(a) if one of those companies:

(i) controls the composition of the board of directors of the other company,

(ii) is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the other company, or

(iii) holds more than one-half of the issued share capital of the other company,

(b) if the same person has, or the same persons have together, a controlling interest under any of the following subparagraphs in one of the companies and a controlling interest under the same or another of the following subparagraphs in the other company:

(i) a person has, or persons have together, a controlling interest in a company if that person or those persons acting together can control the composition of the board of directors of the company,

(ii) a person has, or persons have together, a controlling interest in a company if that person is or those persons acting together are in a position to cast or control the casting of more than half of the maximum number of votes that might be cast at a general meeting of the company,

(iii) a person has, or persons have together, a controlling interest in a company if that person holds or those persons acting together hold more than half of the issued share capital of the company,

(c) if:

(i) more than one-half of the issued share capital of one of those companies (in this paragraph referred to as "the first company") is held by the other company (in this paragraph referred to as "the second company") together with the shareholders of the second company, and

(ii) the proportion of the issued share capital of the second company held by shareholders of the first company is more than the difference between one-half and the proportion of the issued share capital of the first company held by the second company, or

(d) if one of those companies is related to a company to which the other of those companies is related (including a company which is related to the other of those companies by reason of another application or other applications of this paragraph).

(2) For the purposes of subsection (1):

(a) companies may be related to each other notwithstanding that those companies do not own land in New South Wales,

(a1) in subsection (1) (b), "person" includes company,

(b) a reference in that subsection to the issued share capital of a company does not include a reference to any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital,

(c) subject to paragraphs (d) and (e), any shares held or power exercisable by any person or company as a trustee or nominee for any other person or company shall be treated as also held or exercisable by that other person or company,

(d) any shares held or power exercisable by a person or company by virtue of the provisions of any debentures of another company, or of a trust deed for securing any issue of any such debentures, shall be disregarded,

(e) any shares held or power exercisable by, or by a nominee for, any person or company (not being held or exercisable as mentioned in paragraph (d)) shall be treated as not held or exercisable by that person or company if the ordinary business of that person or company includes the lending of money and the shares are held or the power is exercisable only by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money, not being a transaction entered into with a person associated with that person or company within the meaning of Division 2 of Part 1.2 of the Corporations Act 2001 of the Commonwealth, or

(f) without limiting by implication the circumstances in which the composition of a company’s board of directors is to be taken to be controlled by a person or another company, the composition of a company’s board of directors shall be taken to be controlled by a person or another company if that person or other company, by the exercise of some power exercisable whether with or without the consent or concurrence of any other person, can appoint or remove all or a majority of the directors.

(3) The Chief Commissioner, in assessing the land tax payable by companies that are related to each other and that own land in New South Wales:

(a) may assess:

(i) all those companies separately,

(ii) all those companies jointly, or

(iii) any 2 or more of those companies jointly and the remainder separately, and

(b) shall classify:

(i) 1 of those companies, or, where a joint assessment is made, the companies jointly assessed, as a concessional company, and

(ii) the remainder (if any) as non-concessional companies,

and the companies shall be liable accordingly.

(4) Where 2 or more companies are jointly assessed under subsection (3), those companies shall, for the purposes of that assessment, be deemed to be a single company.

(5) Where 2 or more companies related to each other are liable for land tax (whether assessed separately or jointly), each company is liable jointly and severally to pay that tax.

(6) Section 45 of the Taxation Administration Act 1996 applies to an amount payable under subsection (5).

(7) If a company is classified as a non-concessional company, the company, and each of the companies that are related to it, are members of the same group.