South Australian Consolidated Acts South Australian Consolidated Acts (1) In this Act,
unless the contrary intention appears—
"controlled company" means a corporation that is under the control of not more
than five persons and that is neither a corporation in which the public are
substantially interested nor a subsidiary of any corporation in which
corporation the public are substantially interested;
"corporation" means a corporation as defined in the Companies Act 1962 as
amended;
"disposition of property" means any conveyance, transfer, assignment,
settlement, delivery, payment or other alienation of property, whether at law
or in equity, and, without limiting the generality of the foregoing,
includes—
(a) the
allotment or issue of shares in or debentures of a corporation;
(b) the
creation of any trust in property;
(c) the
grant or creation of any lease, mortgage, charge, encumbrance, easement,
licence, partnership, power, option or other right, whether at law or in
equity, or any interest in property;
(d) the
release, discharge, surrender, forfeiture, renunciation, disclaimer, or
abandonment at law or in equity of any debt, contract or chose in action, or
of any interest in property;
(e) the
exercise, whether solely or jointly with any other person or with or without
the consent of any other person, of a general power of appointment in favour
of any person other than the holder of the power;
(ea) for
the purposes only of subsection (12) and (13) of this section, the
distribution by a controlled company of a dividend upon shares held in that
company or of interest on money advanced to that company whether the dividend
or interest be paid to the shareholder or creditor entitled thereto or
accumulated or invested on his behalf or credited in his name to a loan
account or fund however designated or otherwise held or dealt with on his
behalf or as he may permit or direct;
(f) any
thing or things done or omitted to be done by any person, or any thing or
things done or omitted to be done by two or more persons, either jointly or
separately, as a result of which—
(i)
the total estate or the value of the total estate of any
person is diminished; and
(ii)
the total estate or the value of the total estate of any
other person is increased,
whether that result ensued from the doing of or the omission to do one or more
of those things and whether or not the total estate or the value of the total
estate of the person referred to in subparagraph (i) of this paragraph
was diminished at the same time as the total estate or the value of the total
estate of the person referred to in subparagraph (ii) of this paragraph
was increased;
"donee" means a person to whom a gift is made and, where the gift is made to a
trustee for the benefit of another person, includes both the trustee and the
beneficiary;
"donor" means a person by whom a gift is made;
"general power of appointment" includes any power or authority which enables
the holder, or would enable him if he were of full capacity, to make an
appointment in relation to, or dispose of, any property, or to charge any sum
of money upon any property, as he thinks fit for his own benefit, but does not
include any power exercisable by any person, in a fiduciary capacity, for the
benefit only of others arising under a disposition not made by himself, or as
tenant for life, or as mortgagee;
"gift" means any disposition of property which is made (whether with or
without an instrument in writing) otherwise than by will, without
consideration in money or money's worth passing from the person to whom or in
whose favour the disposition is made to the person by whom the disposition is
made, or with any such consideration so passing if the consideration is not
fully adequate;
"gift duty" means the duty chargeable under this Act;
"interest in property" means any estate, interest, right or power whatsoever,
whether at law or in equity, in or over property;
"property" includes real and personal property, any debt, any chose in action
and any estate, interest, right or power whatsoever, whether at law or in
equity, in or over property;
"Territory of the Commonwealth" includes a territory under the trusteeship of
the Commonwealth;
"the Commissioner" means the person for the time being holding or acting in
the office of Commissioner of Succession Duties and includes the person for
the time being holding or acting in the office of Deputy Commissioner of
Succession Duties, under the Succession Duties Act 1929 and any other
officer while performing any of the duties or functions of the Commissioner of
Succession Duties;
"voluntary contract" means a contract or agreement entered into (whether with
or without an instrument in writing and whether such contract or agreement was
made before or after the commencement of this Act) without fully adequate
consideration in money or money's worth.
(2) For the purposes
of the definition of "controlled company" in subsection (1) of this
section—
(a) a
corporation shall be deemed to be a subsidiary only if, by reason of the
beneficial ownership of shares therein, the corporation is under the control
of a corporation which is not a controlled company or of two or more
corporations none of which is a controlled company; and
(b) a
corporation shall be deemed to be a corporation in which the public are
substantially interested only if—
(i)
shares of the corporation (not being shares in respect of
which a fixed rate of dividend, whether with or without a further right to
participate in profits, is payable) carrying more than twenty-five per centum
of the voting power have been allotted to, or acquired by, and are at the
relevant time beneficially owned by, the public, not including a
controlled company; and
(ii)
the right to transfer those shares is not restricted; and
(iii)
those shares are, in the opinion of the Commissioner,
generally available for purchase by the public; and
(c) a
corporation shall be deemed to be under the control of not more than five
persons—
(i)
if any five or fewer persons together possess, or are
entitled to acquire, the greater part of the share capital of the corporation;
or
(ii)
if any five or fewer persons together possess the greater
part of the voting power at a general meeting of the corporation; or
(iii)
if any five or fewer persons together exercise, or are
able to exercise, or are entitled to acquire, direct or indirect control of
the affairs of the corporation and they cannot be deprived of that control by
the exercise of the voting power of any other person or persons at any meeting
of the corporation; or
(iv)
if any five or fewer persons together possess, or are
entitled to acquire, either the greater part of the issued share capital of
the company, or such part of that capital as would, if the whole of the income
of the company were in fact distributed at the relevant time to the members,
entitle them to receive the greater part of the amount so distributed; and
(d) in
determining whether a corporation is or is not under the control of not more
than five persons, a person who is related to another person and that other
person, a person who is a nominee of another person and that other person and
any other nominees of that other person, persons in partnership, or persons
interested in any shares or obligations of the corporation which are subject
to any trust or are part of the estate of a deceased person, shall be treated
as one person.
(3) For the purposes
of paragraph (d) of subsection (2) of this section—
(a) a
person shall be deemed to be related to another person if one of those persons
is the lineal issue, brother, sister, lineal issue of a brother or sister,
spouse, ancestor of the spouse, brother or sister of the spouse, spouse of the
brother or sister of the spouse, lineal issue of the brother or sister of the
spouse, spouse of the lineal issue, spouse of a brother or sister, spouse of
the lineal issue of a brother or sister, or spouse of the lineal issue of a
brother or sister of the spouse, of the other of those persons; and
(c) a
corporation shall be deemed to be related—
(i)
to a person, if the corporation is a controlled company
and any of the persons by whom it is controlled is related, as mentioned in
paragraph (a) of this subsection, to that person; or
(ii)
to another corporation, if those corporations are
controlled companies and if any of the persons by whom either of those
corporations is controlled are related, as mentioned in paragraph (a) of
this subsection, to any of the persons by whom the other of those corporations
is controlled.
(4) A reference in
paragraph (a) of subsection (3) of this section to lineal issue
includes a reference—
(a) to a
step-child; and
(b) to
an adopted child; and
(c) to a
natural child,
and a step-child shall, for the purposes of this section, be deemed to be
related to any other person in the same manner as he would be if he were the
child of both his step-parent and the spouse of his step-parent.
(5) For the purposes
of paragraph (d) of subsection (2) of this section, a person is
deemed to be the nominee of another person if, whether directly or indirectly,
he possesses on behalf of that other person or may be required to exercise on
the direction of or on behalf of that other person any right or power in
relation to a corporation.
(6) Where a debt,
contract, chose in action or interest in property becomes irrecoverable or
unenforceable by action or other process through lapse of time, it shall
unless the Commissioner is satisfied that it was not rendered so irrecoverable
or unenforceable for the purpose of evading or avoiding gift duty—
(a) for
the purposes of paragraph (d) of the definition of
"disposition of property" in subsection (1) of this section, be deemed to
have been released, discharged, surrendered, forfeited, renounced, disclaimed
or abandoned; and
(b) for
the purposes of this Act, be deemed to have been released, discharged,
surrendered, forfeited, renounced, disclaimed or abandoned at the time when it
became so irrecoverable or unenforceable.
(7) Where, after any
debt, contract, chose in action or interest in property has been released,
discharged, surrendered, forfeited, renounced, disclaimed or abandoned as
mentioned in subsection (6) of this section so as to constitute a gift,
there passes from the donee to the donor any consideration that, had the debt,
contract, chose in action or interest in property not become irrecoverable or
unenforceable, would have been consideration to which the donor was entitled
on account of the debt, contract, chose in action or interest in property, the
passing of that consideration shall, for the purposes of this Act, be deemed
not to be a gift.
(8) Where any
consideration in relation to a contract passes from one party to the contract
to another party to the contract and that contract is void, the passing of the
consideration shall, where the Commissioner is of the opinion that, having
regard to the nature of the contract, to the circumstances in which the
contract was entered into, to any relationship of one party to the contract to
any other party to the contract and to any other circumstances that
the Commissioner thinks relevant, the contract was bona fide entered into in
the course of an ordinary commercial transaction and was not entered into for
the purpose of evading or avoiding gift duty, be deemed, for the purposes of
this Act, not to be a gift.
(9) Where—
(a) any
consideration in relation to a contract passes from one party to the contract
to another party to the contract and that contract is void; and
(b)
there passes from that other party to the first mentioned party any
consideration that, had the contract not been void, would have been
consideration to which that first mentioned party was entitled under the
contract,
the passing of the consideration as mentioned in paragraph (b) of this
subsection shall, where the Commissioner is of the opinion that, having regard
to the nature of the contract, to the circumstances in which the contract was
entered into, to any relationship of one party to the contract to any other
party to the contract and to any other circumstances that the Commissioner
thinks relevant, the contract was bona fide entered into in the course of an
ordinary commercial transaction and was not entered into for the purpose of
evading or avoiding gift duty, be deemed, for the purposes of this Act, not to
be a gift.
(10) For the purposes
of this Act—
(a) a
disposition of property referred to in paragraph (f) of the
definition of "disposition of property" in subsection (1) of this section
shall, notwithstanding any other provision of this Act, be deemed to take
effect at the time when the total estate or the value of the total estate of
the person referred to in subparagraph (ii) of that paragraph is
increased; and
(b) the
value of the property in any such disposition shall, notwithstanding any other
provision of this Act, be deemed to be an amount that is equivalent to the
amount by which the total estate or the value of the total estate of the
person referred to in subparagraph (i) of that paragraph is diminished;
and
(c)
notwithstanding any other provision of this Act, the person referred to in
subparagraph (i) of that paragraph shall be deemed to be the person by
whom a disposition or gift is made and the person referred to in
subparagraph (ii) of that paragraph shall be deemed to be the person in
whose favour or to whom a disposition or gift is made; and
(d) in
determining whether or not an increase in the total estate or the value of the
total estate of a person has occurred and, if so, the amount of the increase,
no allowance shall be made in respect of any contingency affecting the
interest of the person in whose favour or to whom a disposition or gift is
made; and
(e) in
determining whether or not a diminution in the total estate or the value of
the total estate of a person has occurred and, if so, the amount of the
diminution, no allowance shall be made in respect of any contingency affecting
the interest of the person by whom a disposition or gift is made.
(11) Without limiting
the generality of the definition of
"disposition of property" in subsection (1) of this section, where the
total estate or the value of the total estate of a person is diminished as the
result, directly or indirectly, of any thing or things done or omitted to be
done by a controlled company of which that person is a director, shareholder
or creditor or in which that person has a pecuniary interest, or by a person
as a director, shareholder or creditor of a controlled company, whether such
thing or things was or were done by the controlled company or that person
alone or together with any other person or persons—
(a) that
first mentioned person shall, for the purposes of this Act, be deemed to have
made a disposition of property and to be, to the exclusion of any other
person, the person by whom the disposition is made; and
(b) a
disposition of property referred to in paragraph (a) of this subsection
shall be deemed to take effect at the time when the diminution referred to in
this subsection takes place; and
(c) the
value of the property in any such disposition shall be deemed to be an amount
that is equivalent to the amount of that diminution, ascertained without any
allowance being made in respect of any contingency affecting the interests of
the person by whom the disposition is made.
(12) Where—
(a) a
disposition of property (whether by way of dividend, interest or otherwise,
but not being an allotment or issue of shares) is made by a
controlled company, either alone or together with any other person or persons,
to one or more of its members or creditors; or
(b) a
disposition of property (being an allotment or issue of shares) is made by a
controlled company whether or not to one of its members,
and—
(c) the
resolution or other decision whereby the disposition was made or the
obligation to make the disposition was created resulted, either wholly or
partly and either directly or indirectly, from the exercise of a right or
power that was possessed, or by the constitution of the controlled company
expressed to be possessed, by any particular person, either alone or together
with any other person or persons; or
(d) by
the exercise of a right or power that was possessed, or by the constitution of
the controlled company expressed to be possessed, by him, a particular person,
either alone or together with any other person or persons, could have
prevented the passing of the resolution or the making of the other decision
whereby the disposition was made or the obligation to make the disposition was
created,
and that particular person, either alone or together with any other person or
persons, could have exercised that or any other right or power whereby a
disposition of that property or of property of equivalent value could have
been made by the company to himself or themselves, that particular person or
that particular person and that other or those other persons, as the case may
be, shall, for the purposes of this Act, be deemed, to the exclusion of any
other person, to have been the person or persons by whom the disposition of
the property is made.
(13) Notwithstanding
any other provisions of this Act, a disposition of property referred to in
subsection (12) of this section and deemed pursuant to that subsection to
have been made by a person other than the controlled company shall, for the
purposes of this Act, be deemed to have been made without consideration except
to the extent that the consideration, if any, that passed from the person to
whom the disposition is made to the person or persons by whom the disposition
is made or to the controlled company was, in the opinion of the Commissioner,
fully adequate, having regard—
(a) to
the nature and extent of the right or power that could have been exercised by
the person or persons by whom the disposition is made, as referred to in that
subsection; and
(b) to
any increase in the total estate or the value of the total estate of the
person to whom the disposition is made that resulted from the disposition; and
(c) to
the nature and extent of the respective shareholdings of the shareholders of
the company; and
(d) to
any other circumstances that he thinks relevant.
(13a) For the purposes
of subsection (13) of this section, the disposition of property shall be
deemed to have been made for adequate consideration—
(a)
where the disposition (in the case of a distribution of dividend or an
allotment or issue of shares) is made, and all such dispositions (if any) made
during the previous three years or during the period commencing on the third
day of December, 1968, and ending on the day the disposition was made,
whichever is the lesser period, were made, to all the shareholders of the
company in proportion to their respective paid up shareholdings (not being
shareholdings entitled to a fixed rate of dividend); or
(b) to
the extent that the person or persons deemed by subsection (12) of this
section to be the person or persons by whom the disposition is made disposes
or dispose of such property to himself or themselves.
(14) Nothing in
subsection (12) of this section shall be construed so as to prevent any
disposition of property made by a controlled company otherwise than as is
mentioned in that subsection from being a disposition of property for the
purposes of this Act.
(15) Where a gift is
made by a controlled company that is incorporated under the law of a State
other than this State or of a Territory of the Commonwealth, but is carrying
on business in South Australia, and gift duty is payable in respect of the
gift by reason of paragraph (b) of subsection (1) of section 9
of this Act, the gift shall, for the purposes of this Act, be deemed to have
been made to the donee by each member of the controlled company to the
exclusion of any other person and the value of the gift made by each such
member shall, for the purposes of this Act, be deemed to be an amount that
bears to the value of the property comprised in the gift the same proportion
as the value of his paid-up shareholding in the controlled company bears to
the value of the paid-up capital of the controlled company.
(16) Where a gift is
deemed under subsection (15) of this section to have been made by a
member (in this subsection referred to as the "donor controlled company ) of a
controlled company that is itself a controlled company, a gift of the value
deemed by that subsection to have been made by the donor controlled company
shall, for the purposes of this Act, be deemed to have been made to the donee
by each member of the donor controlled company to the exclusion of any other
person and the value of the gift made by each member of the donor
controlled company shall, for the purposes of this Act, be deemed to be an
amount that bears to that value the same proportion as the value of that
member's paid-up shareholding in the donor controlled company bears to the
value of the paid-up capital of the donor controlled company.
(17) Without limiting
the generality of the definition of
"gift" in subsection (1) of this section, where a person has a right to
recover any money which has become due and payable to him and does not take
all reasonable steps to enforce payment of that money during the period of
twelve months commencing on the date upon which the money first became due and
payable or during any subsequent period of twelve months, a gift shall, for
the purposes of this Act, be deemed to have been made at the expiration of
each such period, and in respect of any such period the value of the gift
shall be deemed to be the amount of interest that would have accrued at the
expiration of that period if interest, calculated at the rate of five per
centum per annum on the amount unpaid at the commencement of that period had
been payable, or where any interest was actually paid or payable during that
period, the amount of interest so calculated reduced by the interest actually
paid or payable: Provided that this subsection shall not apply in the case of
a contract bona fide entered into in the course of an ordinary commercial
transaction which is not entered into for the purpose of evading or avoiding
gift duty.
(17a) For the purposes
of subsection (17) of this section, a debt, loan or deposit that is
payable on demand shall be deemed not to be due and payable unless and until a
demand for payment thereof has been made by the person entitled to make the
demand addressed to the person by whom the debt, loan or deposit is repayable.
(18) Where a gift of
property is made by two or more persons jointly, the gift shall, for the
purposes of this Act, be deemed to have been made by each of them severally
and the value of the gift made by each of them shall, for the purposes of this
Act, be deemed to be an amount that bears to the total value of the gift the
same proportion as the value of his interest in the property immediately
before the gift was made bears to the value of the property.
(19) Where the doing
of or omission to do any two or more things constitutes a
disposition of property within the meaning of this Act, the fact that any one
of those things itself constitutes such a disposition does not prevent the
doing of or omission to do those two or more things from constituting such a
disposition or the doing of or omission to do that one thing from constituting
such a disposition.
(20) Where a
disposition of property arises by reason of the doing of or omission to do any
two or more things and that disposition is a gift in respect of which
gift duty is payable and any one or more of those things itself constitutes a
disposition of property that is a gift in respect of which gift duty is
payable, the Commissioner may remit such part of that lastmentioned gift duty
as he thinks fit.
(21) Notwithstanding
any other provision of this Act, where a gift that is a
disposition of property referred to in subsections (11) to (17) inclusive
of this section has been made before the third day of December, 1968,
gift duty shall not be payable in respect thereof and it shall not be taken
into account in ascertaining whether gift duty is payable in respect of any
other gift made by the same donor or in ascertaining the amount of any
gift duty so payable.