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LAND TAX ACT 2005 - SECT 46IC Land tax for absentee unit trust scheme if unitholdings notified to Commissioner

LAND TAX ACT 2005 - SECT 46IC

Land tax for absentee unit trust scheme if unitholdings notified to Commissioner

    (1)     If a notice is in force under section 46C for all of the unitholdings in a unit trust scheme (that is an absentee trust) and all of those unitholdings are held by unitholders who are absentee beneficiaries—

        (a)     a unitholder in the scheme 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 scheme that bears the same proportion to the whole of the land subject to the scheme as the unitholder's unitholding in the scheme bears to the total unitholdings in the scheme, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the unitholder, at the applicable rate set out in Part 4 of Schedule 1; and

S. 46IC(1)(b) substituted by No. 67/2017 s. 18(1).

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

              (i)     if the scheme 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. 46IC(1)(b)(ii) amended by Nos 17/2019 s. 39(1), 18/2023 s. 29(1).

              (ii)     if the scheme is in a chain of trusts and is not an ultimate trust, an amount determined 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 scheme (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 scheme;

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

    (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—

05-88a07712.jpg

where—

    A     is the proportion of the unitholder's unitholding in the scheme to the total unitholdings in the scheme;

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

        (b)     the amount determined by the formula—

05-88a07713.jpg

where—

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

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

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

    (3)     If a notice is in force under section 46C for all of the unitholdings in a unit trust scheme (that is an absentee trust) and at least one, but not all, of those unitholdings is held by a unitholder who is not an absentee beneficiary

        (a)     a unitholder in the scheme 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 scheme that bears the same proportion to the whole of the land subject to the scheme as the unitholder's unitholding in the scheme bears to the total unitholdings in the scheme, and is to be assessed for land tax on that land accordingly, together with any other taxable land owned by the unitholder

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

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

S. 46IC(3)(b) amended by Nos 40/2016 s. 23, 67/2017 s. 18(2), 17/2019 s. 39(2), 18/2023 s. 29(2).

        (b)     the trustee of the scheme is to be assessed for land tax on the whole of the land subject to the scheme 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 scheme (as if that land were the only land owned by the trustee);

    C     is—

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

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

05-88a07715.jpg

where—

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

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

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

S. 46IC(4)(a) amended by Nos 40/2016 s. 23, 17/2019 s. 39(3), 18/2023 s. 29(3).

        (a)     the amount determined by the formula—

where—

    A     is the proportion of the unitholder's unitholding in the scheme to the total unitholdings in the scheme;

    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 scheme (as if that land were the only land owned by the trustee);

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

        (b)     the amount determined by the formula—

05-88a07713.jpg

where—

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

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

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

    (5)     There is to be deducted from the land tax payable under subsection (3)(a) by a unitholder 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—

05-88a07712.jpg

where—

    A     is the proportion of the unitholder's unitholding in the scheme to the total unitholdings in the scheme;

    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 scheme (as if that land were the only land owned by the trustee); and

        (b)     the amount determined by the formula—

05-88a07713.jpg

where—

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

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

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

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

Note

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

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