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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.

Associated person can include:

  • Related persons,
  • Related bodies corporate, 
  • Companies if there are common majority shareholders, 
  • Trustees of trusts if there are common beneficiaries, 
  • A company and a trustee if the company or a related body corporate of the company is a beneficiary of the trust of which the trustee is a trustee.

For a complete list, refer to s3 of the Duties Act 2000  (the Act).

Associated transaction means, in relation to the acquisition of an interest in a landholder by a person, an acquisition of an interest in the landholder by another person in circumstances in which those persons are acting in concert; or the acquisitions form, evidence, give effect to or arise from substantially one arrangement, one transaction or one series of transactions.

Beneficiary of a discretionary trust is a person in whose favour capital the subject of the trust may be applied, either in the event of the exercise of a power or discretion in favour of the person, or if the discretion conferred under the trust is not exercised.

Declared public unit trust scheme means a trust registered as a declared public unit trust scheme under the Act. Generally this will be a trust that does not quite meet the criteria of a public unit trust scheme, but is however public in its nature and purpose.

Declared wholesale unit trust scheme means a trust registered as a declared wholesale unit trust scheme under the Act. Generally this will be a trust that does not quite meet the criteria for registration as a wholesale unit trust scheme, but is wholesale in its nature and purpose.

Imminent public unit trust scheme is a trust registered under the Act that will become a listed trust or a widely held trust within 12 months of registration, subject to satisfying the relevant criteria.

Imminent wholesale unit trust scheme is a trust registered under the Act that will be eligible to be registered as a wholesale unit trust scheme within 12 months of registration.

Linked entity is a person or body (corporate or unincorporated) that holds property in its own right or for the benefit of any person (including a trust). A linked entity does not include a natural person, public unit trust scheme or listed company.

Listed company means a company that is listed and whose shares are quoted on the Australian Stock Exchange (ASX) or any exchange of the World Federation of Exchanges unless the listed company is declared by the Commissioner of State Revenue to be a private company. Note that “listed company” is not defined in the Act.

Listed trust is a unit trust scheme in which all units are quoted on the ASX, or on any exchange of the World Federation of Exchanges (in which case the Commissioner must declare the trust to be listed for the purposes of the Act).

Primary production means the use of land primarily for:

  • Cultivating land for the purpose of selling the produce of such cultivation, 
  • Maintaining animals or poultry for the purpose of selling them or their natural increase or bodily produce, 
  • Keeping bees for the purpose of selling their honey, 
  • Commercial fishing, including the preparation for such fishing and the storage or preservation of fish and fishing gear, or 
  • Cultivating or propagating for sale, plants, seedlings, mushrooms or orchids. 

Private company means a corporation that is not limited by shares (for example, a corporation limited by guarantee) or a corporation that is not listed and whose shares are not quoted on the ASX or any exchange of the World Federation of Exchanges (for example, a Pty Ltd company, or an unlisted public company).

Private unit trust scheme means a unit trust scheme that is not a wholesale unit trust scheme or public unit trust scheme.

Public unit trust scheme is either a listed trust, widely held trust, imminent public unit trust scheme or declared public unit trust scheme.

Unit, in a unit trust scheme, means:

  1. A right or interest (whether described as a unit or a sub-unit or otherwise) of a beneficiary under the scheme, or 
  2. A right to any such right or interest.

and, for the purposes of the definitions of listed trust and widely held trust and Part 2 of Chapter 3, means a unit (within the meaning of paragraph (a) or (b)) that entitles the beneficiary to participate proportionately with other unit holders in a distribution of the property of the trust on its vesting.

Unit trust scheme means any arrangements made for the purpose, or having the effect, of providing, for persons having funds available for investment, facilities for the participation by them, as beneficiaries under a trust, in any profits, income or distribution of assets arising from the acquisition, holding, management or disposal of any property whatever pursuant to the trust.

Wholesale unit trust scheme means a unit trust scheme that is registered under the Act as a wholesale unit trust scheme, declared wholesale unit trust scheme or imminent wholesale unit trust scheme.

Widely held trust is a unit trust scheme that is a managed investment scheme registered under Part 5C.1 of the Corporations Act, and:

  • That has not less than 300 registered unitholders, and 
  • In which units have been offered to the public under a prospectus or product disclosure statement lodged with the ASIC, and 
  • None of the registered unitholders in which, either individually or together with associated persons, holds or is entitled to more than 20 per cent of the units in the scheme.