LAND TAX ACT 2005 - SECT 46IB Land tax for absentee fixed trust if beneficial interests notified to Commissioner

LAND TAX ACT 2005 - SECT 46IB

    (1)     If a notice is in force under section 46B for a fixed trust (that is an absentee trust) and all of the beneficial interests in the land are beneficial interests of absentee beneficiaries—

S. 46IB(1)(a) amended by No. 40/2016 s. 22(1).

        (a)     an absentee beneficiary of the trust is taken, for the purposes of this Act other than Division 1 of Part 4, to be the owner

(but not to the exclusion of the trustee) of land subject to the trust that bears the same proportion to the whole of the land subject to the trust as the absentee beneficiary's beneficial interest in land subject to the trust bears to the total beneficial interests in land subject to the trust, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the absentee beneficiary, at the applicable rate set out in Part 4 of Schedule 1; and

S. 46IB(1)(b) substituted by No. 67/2017 s. 17(1).

        (b)     the trustee of the trust is to be assessed for land tax on the whole of the land subject to the trust—

              (i)     if the trust is not in a chain of trusts or is an ultimate trust, at the applicable rate set out in Part 4 of Schedule 1, as if the land were the only land owned by the trustee; or

S. 46IB(1)(b)(ii) amended by Nos 17/2019 s. 38(1), 18/2023 s. 28(1).

              (ii)     if the trust is in a chain of trusts and is not an ultimate trust, using the formula—

where—

    A     is the amount of assessed land tax that is payable;

    B     is the amount determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the trust (as if that land were the only land owned by the trustee);

    C     is the absentee proportion of interests in all land subject to the trust;

    D     is the taxable value of all land subject to the trust.

    (2)     There is to be deducted from the land tax payable under subsection (1)(a) by an absentee beneficiary an amount (if any) necessary to avoid double taxation, being the lesser of—

        (a)     the amount determined by the formula—

where—

    A     is the proportion of the absentee beneficiary's beneficial interest in land subject to the trust to the total beneficial interests in land subject to the trust;

    B     is the total amount of tax assessed on the trustee under subsection (1)(b); and

        (b)     the amount determined by the formula—

where—

    C     is the taxable value of the land of which the absentee beneficiary is taken by subsection (1)(a) to be the owner;

    D     is the total taxable value of all taxable land owned by the absentee beneficiary;

    E     is the amount of tax assessed on the absentee beneficiary under subsection (1)(a).

    (3)     If a notice is in force under section 46B for a fixed trust (that is an absentee trust) for all of the beneficial interests in the land and at least one, but not all, of those interests is a beneficial interest of a beneficiary who is not an absentee beneficiary—

S. 46IB(3)(a) amended by No. 40/2016 s. 22(2)(a).

        (a)     a beneficiary of the trust is taken, for the purposes of this Act other than Division 1 of Part 4, to be the owner (but not to the exclusion of the trustee) of land subject to the trust that bears the same proportion to the whole of the land subject to the trust as the beneficiary's beneficial interest in land subject to the trust bears to the total beneficial interests in land subject to the trust, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the beneficiary—

              (i)     in the case of an absentee beneficiary, at the applicable rate set out in Part 4 of Schedule 1; and

              (ii)     in the case of any other beneficiary, at the applicable rate set out in Part 1 of Schedule 1; and

S. 46IB(3)(b) amended by Nos 40/2016 s. 22(2)(b), 67/2017 s. 17(2), 17/2019 s. 38(2), 18/2023 s. 28(2).

        (b)     the trustee of the trust is to be assessed for land tax on the whole of the land subject to the trust using the formula—

where—

    A     is the amount of assessed land tax that is payable;

    B     is the amount determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the trust (as if that land were the only land owned by the trustee);

    C     is—

        (a)     if the trust is not in a chain of trusts or is an ultimate trust, the taxable value of all land owned by an absentee beneficiary; or

        (b)     if the trust is in a chain of trusts and is not an ultimate trust, an amount determined by the formula—

where—

    D     is the absentee proportion of interests in all land subject to the trust;

    E     is the taxable value of all land subject to the trust.

    (4)     There is to be deducted from the land tax payable under subsection (3)(a) by an absentee beneficiary an amount (if any) necessary to avoid double taxation, being the lesser of—

S. 46IB(4)(a) amended by Nos 40/2016 s. 22(3), 17/2019 s. 38(3), 18/2023 s. 28(3).

        (a)     the amount determined by the formula—

where—

    A     is the proportion of the absentee beneficiary's beneficial interest in land subject to the trust to the total beneficial interests in land subject to the trust;

    B     is that part of the total amount of tax assessed on the trustee under subsection (3)(b) determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the trust (as if that land were the only land owned by the trustee);

    C     is the taxable value of the land of which the absentee beneficiary is taken by subsection (3)(a) to be the owner; and

        (b)     the amount determined by the formula—

where—

    C     is the taxable value of the land of which the absentee beneficiary is taken by subsection (3)(a) to be the owner;

    D     is the total taxable value of all taxable land owned by the absentee beneficiary;

    E     is the amount of tax assessed on the absentee beneficiary under subsection (3)(a)(i).

    (5)     There is to be deducted from the land tax payable under subsection (3)(a) by a beneficiary who is not an absentee beneficiary an amount (if any) necessary to avoid double taxation, being the lesser of—

        (a)     the amount determined by the formula—

where—

    A     is the proportion of the beneficiary's beneficial interest in land subject to the trust to the total beneficial interests in land subject to the trust;

    B     is that part of the total amount of tax assessed on the trustee under subsection (3)(b) determined by applying the applicable rate set out in Part 1 of Schedule 1 on the whole of the land subject to the trust (as if that land were the only land owned by the trustee); and

        (b)     the amount determined by the formula—

where—

    C     is the taxable value of the land of which the beneficiary is taken by subsection (3)(a) to be the owner;

    D     is the total taxable value of all taxable land owned by the beneficiary;

    E     is the amount of tax assessed on the beneficiary under subsection (3)(a)(ii).

    (6)     Subsection (1)(a) or (3)(a) does not apply to a beneficiary who holds a beneficial interest as trustee of another trust.

Note

Under section 46ID(1)(a) such a person is taken to be the owner of land.

S. 46IC inserted by No. 26/2015 s. 32.