Northern Territory Second Reading Speeches

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STAMP DUTY AMENDMENT BILL (NO.2) 1999

Bill presented and read a first time.

Mr REED (Treasurer): I move that the bill be now read a second time.

The purpose of this bill is to provide a stamp duty concession to facilitate the transition to the new mandatory regulatory arrangements imposed by the Commonwealth’s Managed Investment Act 1998.

The Managed Investment Act 1998 came into operation on 1 July 1998 to provide the basis for a comprehensive mandatory restructuring of the arrangements under which collective investment schemes are currently organised. The existing arrangements require investment schemes to be administered by 2 parties, a management company and a trustee. The present guild system requires an independent trustee to hold scheme assets on behalf of the beneficiaries and for the trust assets to be managed by a funds manager. As from 1 July 1998, the dual responsibility system commenced to be phased out and replaced by a single responsibility entity system. All managed investment schemes must convert to the responsible entity system within 2 years. Failure to make the required changes can result in the investment scheme being wound up.

In some instances, conversions to the responsible entity system would incur an ad valorum stamp duty liability depending on how they are structured. The proposed amendments exclude from ad valorum duty instruments where the Commissioner is satisfied that the instrument was entered into as a consequence of a conversion of an undertaking to the new arrangements where there is no change in beneficial interests in the investment scheme property. By way of further explanation, the following transactions are considered to be made as a consequence of a conversion to the new arrangements: transfers of property from the trustee of an existing public unit trust scheme to the responsible entity replacing the trustee, or its custodian or agent; transfers of property from a responsible entity to a custodian or agent of the responsible entity where the transfer is part of a series of transactions made in compliance with the new arrangements; amendments to the existing public unit trust scheme deeds to establish a scheme constitution for a managed investment scheme; declaration of a trust by the existing trustee under which it becomes a custodian of the responsible entity; and a transfer of property upon a change of responsible entity of a managed investment scheme.

To ensure the Land Title’s office is able to process transactions arising from the new regulatory changes, it is proposed to stamp such documents with a nominal charge of $5. The imposition of the nominal charge is in accord with the stamping of other instruments that do not incur ad valorum stamp duty. The proposed amendments take effect from 10 June 1999, the date when the government first announced this intention to make the changes.

I commend the bill to honourable members.

Debate adjourned.

 

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