Northern Territory Consolidated Acts Northern Territory Consolidated Acts56CA. Arrangement relating to certain entitlement
(1) This section applies if the Commissioner is satisfied:
(a) any of the following entitlements of a person is reduced (including reduced to nil) as a direct or indirect result of an arrangement:
(i) an entitlement in the distribution of the property of a corporation as a shareholder on the winding up of the corporation as described in section 56C(6);
(ii) an entitlement on the distribution of a trust as described in section 56C(7); and
(b) one of the following (a relevant transaction ) occurs:
(i) an acquisition of an interest or shareholding by a person in a land-holding corporation;
(ii) an event that would be such an acquisition apart from the arrangement.
(2) Unless the Commissioner is satisfied the arrangement is not a tax avoidance scheme or part of a tax avoidance scheme:
(a) the arrangement must be disregarded for the purposes of this Act in relation to the relevant transaction; and
(b) the Commissioner may determine that, in relation to the relevant transaction, on a specified date:
(i) the person has made an acquisition of an interest or shareholding in the land-holding corporation that is 100% or a lesser specified percentage; or
(ii) the person has an entitlement to receive 100%, or a lesser specified percentage, of the unencumbered value of the property of the corporation or trust mentioned in subsection (1)(a).
Example for subsection (2)(a) and (b)(i)
An amendment of the constitution of a corporation has the effect of reducing to nil the entitlement of all of its shareholders to the distribution of its property on its winding up. The Commissioner considers the amendment is an arrangement covered by this section.
There has been a transfer of shares in the corporation (which is a relevant transaction in relation to a land-holding corporation mentioned in subsection (1)(b)). The reduction of the shareholders' entitlement must be disregarded for this Act in relation to the transfer under subsection (2)(a). In addition, the Commissioner determines under subsection (2)(b)(i) that, in relation to the transfer, a person has acquired a 90% interest in the corporation on a specified day. As a result, the person is liable to pay stamp duty in relation to the acquisition.
(3) To avoid doubt, subsection (2) has effect in relation to the application of section 56C(6) and (7) for the purposes of this Act.
(4) Without limiting subsection (1), an arrangement includes:
(a) a scheme as defined in section 4B(1); and
(b) all or part of the constitution or rules of a corporation, or of the constituent document of a trust; and
(c) an amendment to the constitution, rules or constituent document.