DUTIES ACT 2001 - SCHEDULE 4

DUTIES ACT 2001 - SCHEDULE 4

SCHEDULE 4 – Example for partnership and trust acquisitions and relevant acquisitions for corporate trustees

This example shows how the value of a partnership acquisition or trust acquisition or dutiable value of a relevant acquisition under chapter 3 , part 2 , is worked out in the following circumstances—

(a) a person acquires a 20% interest in—

(i) for a partnership acquisition—a relevant partnership under section 46 ; or

(ii) for a trust acquisition—a relevant trust under section 63 ; or

(iii) for a relevant acquisition under chapter 3 , part 2 —a corporate trustee;

(b) the relevant partnership, relevant trust or corporate trustee holds dutiable property the unencumbered value of which is $100,000 and has a 50% partnership interest in partnership AB;

(c) partnership AB holds dutiable property the unencumbered value of which is $100,000 and has a 50% partnership interest in partnership BC;

(d) partnership BC has a 50% partnership interest in partnership CD;

(e) partnership CD holds dutiable property the unencumbered value of which is $500,000 and is the sole beneficiary in trust E;

(f) trust E holds dutiable property the unencumbered value of which is $1,000,000.

In this example—

(a) trust E is the ultimate entity because it holds dutiable property and there is no other partnership or trust lower in the series holding dutiable property; and

(b) under section 46 (3) (a) , 63 (4) (a) or 222 (3) (a) , partnership CD is the last beneficiary.

The value of the partnership acquisition or trust acquisition or dutiable value of the relevant acquisition is worked out as follows—

Step 1

Partnership CDs trust interest in trust E (100%) is applied to the unencumbered value of the dutiable property held by the trust ($1,000,000).

The result is $1,000,000.

Step 2

Partnership BCs partnership interest in partnership CD (50%) is applied to—

(a) the result under step 1 ($1,000,000); and

(b) the unencumbered value of the dutiable property held by the partnership ($500,000).

The result is $750,000.

Step 3

Partnership ABs partnership interest in partnership BC (50%) is applied to the amount worked out under step 2 ($750,000).

The result is $375,000.

Step 4

The partnership interest of the relevant partnership, relevant trust or corporate trustee in partnership AB (50%) is applied to—

(a) the result under step 3 ($375,000); and

(b) the unencumbered value of the dutiable property held by the partnership ($100,000).

The result is $237,500.

Step 5

The acquirer’s interest (20%) is applied to—

(a) the result under step 4 ($237,500); and

(b) the unencumbered value of the dutiable property held by the relevant partnership, relevant trust or corporate trustee ($100,000).

The value of the partnership acquisition or trust acquisition or dutiable value of the relevant acquisition is $67,500.