Land rich trust registrations
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.
The trustee of a unit trust scheme can apply for registration of the scheme as:
- An imminent public unit trust scheme,
- A declared public unit trust scheme,
- A wholesale unit trust scheme, an imminent wholesale unit trust scheme or a declared wholesale unit trust scheme.
The effect of registration is that a unit trust scheme is provided with concessionary treatment under the land rich provisions. As a result of being registered, a scheme that would otherwise be treated as a private unit trust scheme can be treated as either a public unit trust scheme or wholesale unit trust scheme.
The benefit for a scheme being registered as a public unit trust scheme is that the acquisition of units in such a scheme is generally not subject to duty under the land rich provisions.
For a scheme registered as a wholesale unit trust scheme, the acquisition of units by a qualified investor is only subject to duty if the investor acquires an interest of 50 per cent or more (rather than 20 per cent or more in a private unit trust scheme).
The Commissioner will specify the day on which registration of a unit trust scheme is to take effect. Ordinarily registration of a unit trust scheme will commence from the date the application for registration is made. Registration may be backdated to a date prior to the date of application if the unit trust scheme met the criteria for registration at that time, and the Commissioner is satisfied that there are good reasons for making the registration date retrospective.
However, the Commissioner will not make registration of a unit trust scheme retrospective to a date before a relevant acquisition has been made. In these circumstances the Commissioner will take the view that registration of the scheme is being sought for the purpose (or collateral purpose) of avoiding or reducing the duty otherwise chargeable.