DUTIES ACT 2008 - SECT 42
DUTIES ACT 2008 - SECT 42
42 . No double duty — particular dutiable transactions
(1) Duty is not
chargeable on the transfer of dutiable property to a transferee in conformity
with an agreement for the transfer of dutiable property if that agreement is
duty endorsed.
(2) Duty is not
chargeable on the transfer of dutiable property to a transferee under an
agreement for the transfer of dutiable property if —
(a) when
liability for duty on the agreement arises, the transferee and the purchaser
of the property under the agreement are related as referred to in section 43;
and
(b) the
agreement is duty endorsed on the basis that duty has been paid or is payable
at the general or a concessional rate (that is, under Schedule 2 Division 1 or
2); and
(c) duty
would, but for this section, be chargeable on the transfer of the property at
the rate at which duty was chargeable on the agreement.
(3) If an agreement
for the transfer of dutiable property is duty endorsed and either, or both, of
the following applies —
(a)
there is a difference in the parties liable to duty under the agreement and
the transferees under the transfer, and subsection (2)(a) does not apply;
(b)
there is a difference between the division of the property between the
transferees under the transfer and the division of the property between the
parties liable to duty under the agreement, and subsection (2)(a) does not
apply,
duty is not chargeable
on the transfer of the property except to the extent of the change between the
agreement and the transfer.
Note for this subsection:
Example for subsection
(3) —
On 1 July, under an
agreement for the transfer of dutiable property, A agrees to sell land in
Western Australia to B and C as tenants in common in the undivided shares of
90/100 to B and 10/100 to C for $100 000.
At settlement, under
the transfer, B and a new party, D are tenants in common in equal shares.
Transfer duty is
chargeable on the transfer of the property only to the extent of the change in
the interests in the property between the agreement and the transfer.
Transfer duty would be
chargeable on the transfer of the property on 50/100 X $100 000, which is $50
000 i.e. 10/100 from C to D and 40/100 from B to D.
(4A) If, but for this
subsection, subsections (1) and (3) would both apply to the transfer of
dutiable property, subsection (1) does not apply.
(4B) If an agreement
is for the transfer of dutiable property to a purchaser acting in the
purchaser’s own capacity, but the property is transferred to the
purchaser acting in a capacity as a trustee of a trust, subsection (1) does
not apply to the transfer of the property unless —
(a) the
purchaser is an individual and the trust is a unit trust scheme in which the
purchaser is the sole unit holder; or
(b) the
trust is a unit trust scheme in which the purchaser is a unit holder and each
of the other unit holders are related, as referred to in section 43(1)(a),
(b), (c), (ca), (cb), (d) or (e), to the purchaser; or
(c) the
trust is not a discretionary trust or a unit trust scheme and each beneficiary
of the trust is related, as referred to in section 43(1)(a), (b), (c), (ca),
(cb), (d) or (e), to the purchaser.
(4C) A reference in
subsection (4B) to a unit holder or to a beneficiary is limited to a reference
to a unit holder or beneficiary acting in their own capacity and not as agent,
trustee or otherwise on behalf of any other person.
(4) If an agreement
for the transfer of dutiable property is duty endorsed, duty is not chargeable
on the subsequent transfer of the property if, when liability for duty on the
agreement arose, the person named in the instrument effecting, or evidencing,
the agreement as the purchaser was acting as the agent of the transferee of
the subsequent transfer.
(5) If —
(a) an
agreement for the transfer of dutiable property is duty endorsed; and
(b) the
person named in the agreement as the purchaser entered into the agreement with
the intention that the property would be transferred to —
(i)
a corporation that the person intended to be
incorporated; or
(ii)
a dormant corporation, the shares in which the person
intended to be acquired,
and that property will
not be held by the corporation as trustee of a trust; and
(c) when
liability for duty on the agreement arose, action was being taken to —
(i)
incorporate the corporation referred to in paragraph
(b)(i); or
(ii)
acquire the shares in the corporation referred to in
paragraph (b)(ii),
duty is not chargeable
on the subsequent transfer of the property to the corporation referred to in
paragraph (b)(i) or (ii).
(6) In subsection (5)
—
dormant corporation means a corporation that,
since it was incorporated —
(a) has
not had any assets or liabilities other than share capital for subscriber
shares or shares issued to replace subscriber shares of the same value on
their redemption; and
(b) has
not been party to an agreement or a beneficiary or trustee of a trust; and
(c) has
not issued or sold any shares or rights relating to shares other than
subscriber shares, rights relating to subscriber shares or shares issued to
replace subscriber shares of the same value on their redemption.
(7) Duty is not
chargeable on a transfer of dutiable property by the vendor under an agreement
for the transfer of the property that results in the property becoming scheme
property for a managed investment scheme if —
(a) the
Commissioner is satisfied that a managed investment scheme has been, or is to
be, established by means of an offer to subscribe to the scheme made to the
public; and
(b) the
Commissioner is satisfied that before the establishment of the scheme —
(i)
the person named as purchaser in an agreement for the
transfer of dutiable property entered into that agreement; or
(ii)
the person promoting the scheme arranged for that
agreement to be entered into by the person named in the agreement,
with the intention
that the property concerned would become scheme property; and
(c) the
agreement provides to the effect that, if the scheme is not established, the
agreement is terminated; and
(d) the
agreement is duty endorsed.
(8) If —
(a)
there is an agreement for the transfer of dutiable property (the first
agreement ); and
(b)
after the first agreement takes place, one or more dutiable transactions over
all or part of the dutiable property the subject of the first agreement takes
place (the intervening transactions ); and
(c) to
give effect to the first agreement and the intervening transactions, one or
more transfers of dutiable property (the transfers ) are effected by one or
more parties to the first agreement and the intervening transactions; and
(d) the
first agreement and the intervening transactions are duty endorsed,
duty is not chargeable
on the transfers.
Note for this subsection:
Example for subsection
(8) —
On 1 July, under an
agreement for the transfer of dutiable property, A agrees to sell land in
Western Australia to B for $100 000. Settlement is to take place on 31 July.
On 7 July, under an agreement for transfer, B agrees to sell the land to C for
$120 000. Again, settlement is to take place on 31 July. Before 31 July, B
directs A, that at settlement, A transfer the land to C.
The agreement between
A and B is the first agreement. The agreement between B and C is the
intervening transaction. Transfer duty is not chargeable on the transfer from
A to C if the first agreement and intervening transactions are duty endorsed.
(9) Duty is not
chargeable on a transfer to a trustee of dutiable property subject to a
declaration of trust in respect of the same dutiable property if the
declaration of trust is duty endorsed, or under subsection (11) duty is not
chargeable on the declaration of trust.
(10) Duty is not
chargeable on a declaration of trust that declares the same trusts as those
upon and subject to which the same dutiable property was transferred, or
agreed to be transferred, to the person declaring the trust if the transfer,
or agreement, is duty endorsed.
(11) Duty is not
chargeable on a declaration of trust if —
(a) the
declaration of trust supersedes another declaration of trust which is duty
endorsed and declares the same trusts as were declared under the superseded
declaration of trust; and
(b) the
beneficiary under the declaration of trust is the same as under the superseded
declaration of trust; and
(c) the
dutiable property subject to the declaration of trust —
(i)
is wholly or substantially the same as the property that
was the subject of the superseded declaration of trust at the time of the
declaration of the superseded declaration of trust; or
(ii)
represents the proceeds of re-investment of property that
was the subject of the superseded declaration of trust at the time of the
declaration of the superseded declaration of trust; or
(iii)
is property to which both subparagraphs (i) and (ii)
apply.
(12) Duty is not
chargeable on a transfer of dutiable property resulting from a dutiable
transaction referred to in section 11(1)(d) if the vesting of the dutiable
property is duty endorsed.
(13) Duty is not
chargeable on a transfer of dutiable property in accordance with a foreclosure
order if the foreclosure order is duty endorsed.
(14) Duty is not
chargeable on a transfer of dutiable property in accordance with a partnership
acquisition if the partnership acquisition is duty endorsed.
[(15) deleted]
(16) Duty is not
chargeable in respect of a dutiable transaction prescribed, on such condition
and under such circumstances as are prescribed, if the dutiable transaction is
one of 2 dutiable transactions that relate to the same transaction for the
same dutiable property.
[Section 42 amended: No. 32 of 2012 s. 5 and 6;
No. 12 of 2019 s. 18; No. 37 of 2022 s. 7.]