Exemptions and concessions
Prior 1 July 2012, if you acquired an interest, such as shares or units, in a company or unit trust scheme that is a land rich landholder, you may be liable for land rich duty.
From 1 July 2012, the landholder provisions apply.
The following information outlines the operation of the land rich duty provisions in respect of acquisitions of interests in land rich landholders that occurred prior to 1 July 2012. All references to the Duties Act 2000 are to the Act in force prior to 1 July 2012.
There are a number of circumstances in which acquisitions of interests in a land rich landholder will be exempt from duty under the land rich provisions, including:
- If the means by which a person acquired an interest would have resulted in no ad valorem duty being payable under Chapter 2 of the Duties Act 2000 (the Act) had the subject of the acquisition been a transfer of the land of the landholder to the person.
- If the interest was acquired by a person in his or her capacity as either a receiver or trustee in bankruptcy, a liquidator or an executor or administrator of an estate of a deceased person.
- If the interest was acquired solely as the result of the making of a compromise or arrangement with the landholder’s creditors under Part 5.1 of the Corporations Act 2001.
- If the interest was acquired solely from a pro rata increase in the interests of all unitholders or shareholders of the landholder.
- If the Commissioner determines that the application of the land rich provisions to the acquisition would not be just and reasonable. This exemption does not have broad application and will only be applicable in cases where the acquisition of an interest in a land rich landholder would be dutiable because of an anomaly in the application of the land rich provisions.
In addition to the above exemptions, the land rich provisions provide certain concessions from duty, including:
- If a financier acquires an interest in a land rich landholder as a condition of providing financial accommodation, the acquisition statement is not chargeable with duty, provided the interest is re-transferred by the financier within five years.
- If a widely held unit trust redeems units for the purpose of re-issuing or re-offering the units for sale, and a unitholder becomes entitled to more than 20 per cent (but not more than 25 per cent) of units, the scheme may retain its status as a public unit trust scheme, provided the unitholder’s interest is reduced back to below 20 per cent within 30 days.
Please refer to ss. 85, 89 and 89A of the Act.