This statement is to be completed for a relevant acquisition made in a landholder on or after 1 July 2012 and is completed via our online SmartForm.
These explanatory notes are intended as a guide only and should be read in conjunction with the appropriate legislation. If necessary, professional advice should be sought.
1) This statement must be completed and lodged with the State Revenue Office within 30 days of the date that a relevant acquisition is made in a landholder. Both the acquirer of the relevant acquisition and the landholder in which the acquisition was made are required to complete and lodge a statement - see section 83 of the Duties Act 2000 (the Act). To reduce compliance costs, a landholder is not required to separately lodge a statement if the acquirer has lodged a statement within the 30-day timeframe. If neither the acquirer nor the landholder lodges a statement within this time, penalties may be imposed on both parties. In cases involving the conversion of a private company to a listed company or a private or wholesale unit trust scheme to a public unit trust scheme, the landholder in which the acquisition was made is required to complete and lodge this statement within 30 days of the date of the relevant acquisition (see sections 89B and 89C of the Act).
2) Section 71 of the Act defines a ‘landholder’ to include any private or public company or unit trust scheme that has land holdings in Victoria with a total unencumbered value of $1 million or more. It also defines a ‘private landholder’ to be a landholder that is a private company, private or wholesale unit trust scheme and a ‘public landholder’ to be a landholder that is a listed company or a public unit trust scheme, being a listed trust, a widely held trust or a registered declared public unit trust scheme (see section 3 of the Act for definitions for all these terms).
3) Section 78 of the Act sets out the meaning of the term ‘relevant acquisition’. In summary, the section provides that a person makes a relevant acquisition if:
a) The person acquires an interest in a landholder that:
i. is of itself a significant interest in the landholder, or
ii. amounts to a significant interest in the landholder when aggregated with all current and past acquisitions of interests made in the landholder by the person, an associated person, or any other person in an associated transaction.
b) After an interest referred to above was acquired, the person, an associated person or any other person whose interest was aggregated as set out in sub paragraph (a)(ii) above, acquires a further interest in the landholder.
Note: For the purpose of determining whether a relevant acquisition has been made, certain interests are disregarded including interests acquired before:
i) 15 November 1987 or at a time when the landholder did not hold land in Victoria (see section 78(5) of the Act),
ii) 1 July 2009 in a landholder that is either a private company, a private unit trust scheme, a wholesale unit trust scheme or a public unit trust scheme (see clause 31(2) of schedule 2 to the Act), and
iii) 1 July 2012 in a landholder that is a listed company (see clause 31(3) of schedule 2 to the Act).
4) Section 79 of the Act sets out the meanings for the terms ‘interest’ and ‘significant interest’. It provides that a person has an interest in a landholder if the person has an entitlement (otherwise than as a creditor or other person to whom the landholder is liable), whether directly or through another person, to a distribution of property from the landholder on a winding up of the landholder. A person who has an interest in a landholder has a significant interest in the landholder if the person, in the event of a distribution of all property of the landholder immediately after the interest was acquired, would be entitled to, in the case of a landholder that is a:
a) Private unit trust scheme – 20 per cent or more of the property distributed, or
b) Private company or a wholesale unit trust scheme – 50 per cent or more of the property distributed, or
c) Listed company or public unit trust scheme – 90 per cent or more of the property distributed.
5) Section 80 of the Act outlines how an interest in a landholder may be acquired. It provides that a person acquires an interest if the person obtains an interest beneficially, including if the person’s interest increases, in the landholder regardless of how it is obtained or increased. A person may also acquire an interest if the capacity in which the person held the interest changes. To avoid doubt, it is not necessary to have a transfer of shares or units for the acquisition of an interest in a landholder. Consequently, a person may acquire an interest in a landholder by way of:
a) Purchase, gift, allotment or issue of a share or unit.
b) Cancellation, redemption or surrender of a share or unit.
c) Abrogation or alteration of a right pertaining to a share or unit.
d) Payment of an amount owing for a share or unit.
6) Except for those interests specifically excluded from aggregation under the Act (see note 3 above), there is no time limit on the aggregation of past acquisitions under section 78 of the Act. However, duty is limited to only those acquisitions that were made in the last three years. Consequently, all past acquisitions of interests by the relevant person, any associated persons and/or other persons pursuant to an associated transaction must be included in Part D of this statement (see section 3 of the Act for definitions of ‘associated person’ and ‘associated transaction’). However, the interests of associated persons may be excluded in determining whether a relevant acquisition has occurred if the Commissioner is satisfied that the interests of the persons were acquired, and will be used, independently and were not acquired, and will not be used, for a common purpose. The Commissioner’s discretion does not apply if the persons are associated persons because they are related bodies corporate or if their acquisitions were part of an associated transaction (see section 78(2) and (3) of the Act).
7) Section 81 of the Act sets out when the acquisition of an economic entitlement in a private landholder may be regarded a relevant acquisition in the landholder. It only applies if the economic entitlement acquired by a person either alone or together with an associated person was acquired other than by way of a relevant acquisition dutiable under section 78 of the Act and amounts to an interest of 50 per cent or more of the economic benefit to which it relates. Aggregation of economic entitlements is limited to a three year period and excludes all entitlements acquired before 1 July 2012. If section 81 applies, a relevant acquisition is taken to have occurred to the extent of the percentage acquired unless the Commissioner determines a lesser percentage interest is appropriate in the circumstances (see section 81 of the Act for further details and the meaning of an ‘economic entitlement’).
8) Section 82 of the Act sets out when the acquisition of control of a private landholder may give rise to a relevant acquisition in the landholder. It only applies where a person acquires control of a private landholder other than by way of a relevant acquisition dutiable under either section 78 or 81 of the Act. If section 82 applies, the person is taken to have made a relevant acquisition of a 100 per cent interest in the landholder unless the Commissioner determines a lesser percentage interest is appropriate in the circumstances (see section 82 of the Act for further details and the meaning of ‘control’).
9) Section 72 of the Act defines a ‘land holding’ as an interest in land other than the estate or interest of a mortgagee, chargee or other secured creditor or a profit à prendre. From 1 July 2019, it also includes:
a) An interest in fixtures that is held separately from the land on which the fixtures are located.
b) An interest in land taken to be beneficially owned due to an economic entitlement held in relation to the land.
10) A landholder’s land holdings include interests in land holdings held directly by the landholder as well as interests in land holdings the landholder is entitled to through linked entities and discretionary trusts. They also extend to lands the landholder and its linked entities have contracted to buy but not settled as at the date of the relevant acquisition (see sections 72, 74, 75 and 76 of the Act).
11) To be a direct land holding of a company, the interest held by the company in the land must be a beneficial interest. To be a direct land holding of a unit trust scheme, the interest must be held by the trustee of the scheme in its capacity as trustee or a custodian or other agent in the capacity as custodian or agent of the trustee of the scheme (see section 72 of the Act).
12) Section 75 of the Act deals with the constructive ownership of land holdings through linked entities. Under section 75 of the Act, a landholder is taken to be entitled to land through a linked entity or entities if on a winding up of all the entities and without regard to any liabilities of the linked entities, the landholder would receive a distribution of any of the property held by any of the linked entities. The interest in land the landholder is taken to hold through linked entities is the proportion of the land held by the linked entities that is equivalent to the proportion of the property the landholder would be entitled to receive if all the entities were to be wound up. However, land of linked entities is not counted unless at least 20 per cent of the land is traced up to the landholder (see section 75 of the Act for further details and the meaning of a ‘linked entity’).
13) Section 76 of the Act deals with the constructive ownership of land holdings through discretionary trusts. Under section 76 of the Act, a landholder or linked entity is taken to be entitled to land of a discretionary trust if the landholder or linked entity is a beneficiary of the trust. Where section 76 of the Act applies, a landholder or linked entity is taken to be entitled to 100 per cent of the land of the trust, unless the Commissioner determines a lesser percentage is appropriate in the circumstances (see section 76 of the Act for further details and the meaning of a ‘beneficiary’).
14) Section 89G of the Act provides that the provisions of the Act for ascertaining the value of transfers chargeable with ad valorem duty apply in the same way to a relevant acquisition under Part 2 of Chapter 3 of the Act and the value of land holdings to which the relevant acquisition relates. Pursuant to section 22(1) of the Act, the ‘unencumbered value’ of land means the amount for which the land might reasonably have been sold in the open market at the time of the relevant acquisition free from any encumbrance to which the land was subject at that time. In determining the unencumbered value of a land holding, section 89G of the Act further provides that any arrangement made in respect of the land holding that has the effect of reducing its value is to be disregarded. However, an arrangement is not to be disregarded if the Commissioner is satisfied that the arrangement was not made as part of an arrangement or scheme with a collateral purpose of reducing the duty otherwise payable in relation to the relevant acquisition.
15) Evidence of the payment of duty on an instrument evidencing the acquisition of shares or units comprising a relevant acquisition must be provided, such as the stamped instrument or a copy of the instrument bearing the duty imprint (see Part H in statement).
16) Section 89D of the Act provides that an acquisition by a person of an interest in a landholder is an exempt acquisition:
a) If the means by which the person acquired the interest would have resulted in no ad valorem duty being payable under Chapter 2 had the subject of the acquisition been a transfer of the land of the landholder to the person.
b) If the interest was acquired in the person’s capacity as a receiver or trustee in bankruptcy, as a liquidator or an executor or administrator of the estate of a deceased person.
c) If the interest was acquired solely as the result of making a compromise or arrangement with the landholder’s creditors under Part 5.1 of the Corporations Act which has been approved by the court.
d) If the interest concerned is acquired solely from a pro rata increase in the interests of all unit holders or shareholders.
17) Section 89E of the Act provides a concession from duty in circumstances where the Commissioner is satisfied that there is an anomalous duty outcome arising from the application of Part 2 of Chapter 3 of the Act to a particular transaction and, because of that anomaly, the duty payable under Part 2 of Chapter 3 of the Act is greater than the duty that would have been payable under Chapter 2 of the Act if the subject of the acquisition been a direct transfer of the land. In these circumstances, the Commissioner has a discretion to reduce the duty payable on the acquisition under Part 2 of Chapter 3 of the Act to an amount which is not less than the duty that would have been payable under Chapter 2 had the subject of the acquisition been a direct transfer of the land to the person. If a higher duty outcome is intended from the operation of Part 2 of Chapter 3 of the Act, then no concession is available. Section 89E of the Act does not apply to a relevant acquisition that is the acquisition of an economic entitlement under section 81 of the Act or the acquisition of control under section 82 of the Act. Full and precise details of the anomalous duty outcome resulting from the application of the provisions must be provided when claiming this concession.
18) Section 89F of the Act provides that an acquisition statement is not chargeable with duty if the acquisition is effected solely for the purpose of securing financial accommodation and the person acquiring the interest is providing finance to the person from whom the interest is acquired. Evidence that the acquisition is effected solely for the provision of finance by the person acquiring the interest must be provided with this statement.
19) Section 3 of the Act defines a foreign purchaser to mean a person who is a foreign natural person, a foreign corporation or the trustee of a foreign trust. A foreign natural person means a natural person who is not an Australian citizen within the meaning of the Australian Citizenship Act 2007 (Cth), the holder of a permanent visa within the meaning of section 30(1) of the Migration Act 1958 (Cth) or a New Zealand citizen who is the holder of a special category visa within the meaning of section 32(1) of the Migration Act 1958 (Cth).
20) A foreign corporation means a corporation that is incorporated outside Australia, or a corporation in which a controlling interest is held by a foreign natural person, another foreign corporation or the trustee of a foreign trust. A person has a controlling interest in a foreign corporation if the person is in a position to control more than 50 per cent of the voting power or the potential voting power in the corporation, or has an interest in more than 50 per cent of the issued shares in the corporation. A person may also be considered to have a controlling interest in a corporation if the Commissioner has made a determination in respect of the person pursuant to section 3C of the Act. Under section 3C, the Commissioner may determine that a person has a controlling interest in a corporation if, in the Commissioner’s opinion the person has the capacity to determine or influence, directly or indirectly, the outcome of decisions about the corporation’s financial and operating policies.
21) A foreign trust means a trust in which a substantial interest in the trust estate is held by a foreign corporation, a foreign natural person or another person that holds the substantial interest as trustee of another foreign trust. A person has a substantial interest in the trust estate of a foreign trust if the person has a beneficial interest of more than 50 per cent of the capital of the estate of the foreign trust, or the Commissioner has made a determination under section 3D in respect of the person. Under section 3D, the Commissioner may determine that a person has a substantial interest in a trust estate if, in the Commissioner’s opinion, the person has the capacity to determine or influence the outcome of decisions about the administration and conduct of the trust.
22) In determining the additional duty payable on acquisitions of interests by foreign purchasers, residential property is defined, among other things, as land in Victoria capable of being used solely or primarily for residential purposes and which may be lawfully used in that way. It also includes land and/or a building on land a person intends to develop and be used solely or primarily for residential purposes. Residential property however does not include land capable of being used solely or primarily as commercial residential premises, a residential care facility, a supported residential care service or for the purposes of a retirement village (see section 3G of the Act).
23) If applicable, a director or other responsible officer of either the acquirer of the relevant acquisition or the landholder in which the acquisition was made must sign this statement.