2015

LEGISLATIVE ASSEMBLY OF THE
NORTHERN TERRITORY

TREASURER

REVENUE AND OTHER LEGISLATION AMENDMENT BILL 2015
SERIAL NO. 123

EXPLANATORY STATEMENT

GENERAL OUTLINE

This Bill amends the Gaming Control Act, Stamp Duty Act, Payroll Tax Act, Taxation Administration Act, and First Home Owner Grant Act. The changes made by the Bill form part of the 2015-16 Budget.

The Gaming Control Act is amended to:
·	create a head of power to impose annual licence fees and regulatory fees on casinos in the Northern Territory; and

·	require casinos in the Northern Territory to pay a gaming machine community benefit levy to the Community Benefit Fund at the rate of 10 per cent of the casino’s gross monthly profit from gaming machines, effective from 1 July 2015.

The Stamp Duty Act is amended to:
·	increase the stamp duty senior, pensioner and carer concession from $8500 to $10 000, for all transactions entered into on or after 28 April 2015;

·	relax the residency requirements for the stamp duty principal place of residence rebate and senior, pensioner and carer concession so that only one applicant for these concessions is required to occupy the property from 28 April 2015;

·	abolish life insurance stamp duty, and clarify that all life insurance riders are subject to stamp duty as general insurance; and

·	effect a number of miscellaneous administrative improvements to clarify or improve the integrity of the Stamp Duty Act.

The Payroll Tax Act is amended to:
·	clarify that tax exemptions do not apply to charities that operate commercially in competition with the private sector, or for organisations carried on for the promotion of trade, industry or commerce;

·	remove the payroll tax exemption for apprentices and trainees;

·	remove the insurance sellers and door-to-door salespersons relevant contract payroll tax exclusions; and

·	clarify the ‘owner driver’ relevant contract payroll tax exclusions.

The Taxation Administration Act is amended to:

·	ensure the Commissioner of Territory Revenue can obtain a valuation for the purposes of assessing a tax liability under any circumstances; and

·	clarify the types of valuation costs that may be recovered by the Commissioner of Territory Revenue.

The First Home Owner Grant Act is amended to provide that the residence requirements for the first home owner grant only require one applicant to occupy the property and to make a consequential amendment to remove an unnecessary valuation provision.

NOTES ON CLAUSES

PART 1 – PRELIMINARY MATTERS

Clause 1.	Short title

This is a formal clause which provides for the citation of the Act. When passed, the Act may be referred to as the Revenue and Other Legislation Amendment Act 2015.

Clause 2.	Commencement

This clause provides for various parts of the Bill commencing at different times.

Subclause (1) provides that the Act, other than the prescribed provisions in subclause (2) and (3) commence on Administrator’s assent.

Subclause (2) provides that Part 2 and Part 5, specifically Divisions 1-4 commence on 28 April 2015.

Subclause (3) provides that Parts 3 and 4, and Part 5, Divisions 5-8, and Part 6 commence on 1 July 2015.

PART 2 – AMENDMENT OF THE FIRST HOME OWNER GRANT ACT

Clause 3.	Act amended

Clause 3 provides that this Part of the Bill amends the First Home Owner Grant Act.

Clause 4.	Section 12 amended

Section 12 of the First Home Owner Grant Act is amended by clause 4 to require only one, rather than all, of the applicants for the grant to meet the residence requirements at existing section 12(1).

Subclause (1) is a consequential amendment to subsection 12(1) to reference new subsection 12(4).

Subclause (2) inserts new subsection 12(4) to require only one, rather than all, of the applicants for the grant, to occupy the property as their principal place of residence for a continuous period of six months. This new requirement applies to transactions which commence on or after 28 April 2015. For clarity, the amendments do not affect the ability of the Commissioner to exercise the discretion contained in existing subsection 12(3).

Clause 5.	Section 45A amended

Clause 5 removes a redundant provision at section 45A(2) to ensure the First Home Owner Grant Act valuation provisions are consistent with the valuation provisions contained in section 25 of the Taxation Administration Act, as amended by the Bill.

PART 3 – AMENDMENT OF THE GAMING CONTROL ACT

Clause 6.		Act amended

Clause 6 provides that this Part of the Bill amends the Gaming Control Act.

Clause 7.		Section 20 amended

This clause makes a minor drafting amendment to section 20(2)(c) to ensure consistency with the wording in sections 23 and 24 of the Gaming Control Act.

Clause 8.		Section 23 amended

Clause 8 amends section 23 to ensure that the surrender of a casino licence by a Licensee is subject to the payment of all outstanding levies, as well as taxes and fees.

Clause 9.		Section 24 amended

Subclause (1) replaces the heading to section 24.

Subclause (2) replaces subsections 24(2) and (3) with new subsections 24(2) and (3).

New subsection (2) imposes a requirement of a person mentioned in existing subsection 24(1) to pay all of the fees, taxes and levies specified in, prescribed by, or calculated in accordance with, an agreement, or regulations made for section 24. This reflects the existing provisions in section 24 and the insertion of new regulation making powers at section 80 by clause 12 of this Bill.

New subsection (3) makes a consequential amendment to reflect the new wording of section 24(2). New subsection (3) ensures that subsection 24(2) does not limit a person’s liability to pay any other fees, taxes or levies under a law of the Territory.

Clause 10.		Part 3, Division 3 inserted

Clause 10 inserts into the Gaming Control Act new Part 3, Division 3, containing new section 35A, providing for a casino gaming machine community benefit levy.

Section 35A(1) provides that the Licensee of a casino must pay the gaming machine community benefit levy to the Director-General each month.

Section 35A(2) applies a number of procedural and administrative provisions contained in the Gaming Machine Act to the payment of the casino gaming machine community benefit levy, except to the extent that they relate to the gaming machine tax or costs and charges under section 149A of the Gaming Machine Act. This is necessary to ensure the casino levy operates, as much as possible, under the same administration and procedures as the existing gaming machine community benefit levy scheme that is paid by Territory hotels.

Section 35A(3) makes a number of definitional adjustments to the terms used in the Gaming Machine Act, reflecting the different terminology used in relation to casinos.

Section 35A(4) allows an electronic monitoring system to be used at a casino for the purposes of assessing the gaming machine community benefit levy, with the assessment period being a monthly period corresponding to when the first report is made. This aligns the treatment for casinos with other venues that are permitted to use electronic monitoring and reporting systems under the Gaming Machine Act.

Clause 11. 	Section 68C amended

New subsection 68C(1)(aa) is inserted by clause 11 to require all money received by the Director-General in payment of the community benefit levy under new section 35A, to be paid into the Community Benefit Fund.

Clause 12. 	Section 80 amended

Clause 12 amends section 80(2) of the Gaming Control Act to introduce new regulation making powers exercisable by the Administrator.

Subclauses (1), (2) and (3) make a minor drafting amendment to section 80(2).

New regulation making powers, subsections 80(2)(u), (v) and (w) are inserted, by subclause (4) and provide for:
·	the making of regulations to impose fees, taxes and levies of the kind provided for in new section 24(2)(b) and (d);

·	the making of regulations for matters required or permitted to be prescribed for the provisions of the Gaming Machine Act which apply for the purposes of new section 35A; and

·	the making of regulations for methods for, and other procedures relating to, the payment of fees, taxes, levies and penalties and other amounts payable under the Gaming Control Act.

PART 4 – AMENDMENT OF PAYROLL TAX ACT

Clause 13. 	Act amended

Clause 13 provides that this Part of the Bill amends the Payroll Tax Act.

Clause 14.		Section 3 amended

Clause 14 inserts the following new definitions into section 3 of the Payroll Tax Act: ‘category 1 to 3 purpose’; ‘educational company’; ‘educational institution’; ‘entity’; ‘industrial association’; ‘non-profit entity’; ‘political party’; ‘professional association’; and ‘trade, industry or commerce entity’. These new defined terms signpost to new definitions inserted in Part 4 Division 1.

Clause 15.		Section 32 amended

Subclause (1) makes a minor amendment for drafting purposes.

The anti-avoidance provision in section 32(2)(c) is omitted by subclause (2). This anti-avoidance provision is replaced by a new anti-avoidance provision inserted by subclause (4).

Subclause (3) removes the insurance seller and door-to-door salesperson relevant contract exclusions from the Payroll Tax Act and amends the ‘owner-driver’ exclusion.

The amendments to the ‘owner-driver’ exclusion restrict its operation to services solely for or ancillary to the conveyance of goods. This is to prevent the exclusion being claimed for contracts under which services or work which are not ancillary to the conveyance of goods are provided. The amendments also clarify that the exclusion applies not only to contracts for services ancillary to the conveyance of goods, but also to contracts for the conveyance itself. For example, a contract solely for the delivery and unloading of materials may receive the owner-driver exclusion, but a contract also for the installation and consumption of those materials may not.

Subclause (4) inserts new subsections 32(2A) and 32(2B). Subsection 32(2A) provides that the exclusions at subsections 32(2)(a),(b) and (d) are not available on an apportionment basis, and that if the contract is partly for excluded services and non-excluded services, then the exclusions do not apply.

New subsection 32(2B) is an anti-avoidance provision that allows the Commissioner to prevent an exclusion from applying if the contract was entered into with an intention, either directly or indirectly, to avoid or evade tax.

Clause 16.		Section 40 amended

This clause makes an amendment to section 40(2) as a consequence of removing the trainees and apprentices exemption at Schedule 2.

Clause 17.		Part 4, Division 1 replaced

Clause 17 replaces Part 4, Division 1 of the Payroll Tax Act, with new Division 1 to make a number of amendments to the non-profit payroll tax exemption.

New section 48 defines the signposted terms inserted into section 3 of the Payroll Tax Act, as well as the terms ‘educational company’ and ‘educational institution’ as previously defined under the former section 48.

New section 48A defines a ‘non-profit entity’ for the purposes of the exemption. This defined term reflects the definitions that existed prior to these amendments, but also contains provisions to expressly provide that industrial associations and political parties are not able to receive the non-profit exemption, whether or not those entities are a charity at common law. The definitions also provide that a professional association, and a trade, industry or commerce entity, cannot receive the non-profit exemption, whether or not they are a charity at common law, unless the Commissioner of Territory Revenue makes a determination under new section 48E.

New section 48B defines a ‘trade, industry or commerce entity’ for the purposes of new Division 1.

New subsection 48B(1) and (2)(a) provides that an entity that has as any purpose the promotion of trade, industry or commerce, will be a trade, industry or commerce entity unless the sole or predominant purpose of that entity is a category 1 to 3 purpose (that is, the relief of poverty, the advancement of education or the advancement of religion).

New subsection 48B(2)(b) ensures that dual or multiple purpose entities with several category 1 to 3 purposes can have their charitable purposes aggregated when determining whether they are a trade, industry or commerce entity. For example, an entity which has two equal purposes, being the relief of poverty and the advancement of religion, and these purposes are together a predominant purpose, then the entity will not be a trade, industry or commerce entity, even if it has a purpose to promote trade industry or commerce and neither of the category 1 to 3 purposes is a sole or predominant purpose alone.

New section 48C prescribes when wages will be exempt wages under the non-profit exemption.

New subsection 48C(1)(a) provides that the non-profit entity must carry on charitable activities to receive the exemption. ‘Carries on charitable activities’ is defined broadly at section 48C(2), and is not restricted only to activities for a category 1 to 3 purpose.

New subsection 48C(1)(b)(i) provides that wages will be exempt only if the wages are paid to a worker who is engaged predominantly for work in connection with the carrying on of charitable activities of the entity.

New subsection 48C(1)(b)(ii) provides that wages paid to workers who perform commercial or competitive activities, as defined at new subsection 48C(4), are not exempt under the non-profit exemption.

New subsection 48C(2) defines ‘carries on charitable activities’, as activities carried out directly by an entity that is predominantly of a religious, charitable, benevolent, philanthropic or patriotic nature, which is not restricted to activities for a category 1 to 3 purpose.

New subsection 48C(3) ensures that the provision of money to another entity which carries on charitable activities is not, by itself, carrying on a charitable activity. This means that, for example, an investment body will not receive the non-profit exemption merely because it directs its funds to a charity.

New subsection 48C(4) defines what activities constitute a ‘commercial or competitive activity’. Entities that undertake commercial or competitive activities are not able to receive the non-profit exemption. The commercial or competitive activities include anything not related to the charitable purposes of the entity, any commercial activities, such as investment activities, and any activities which compete with a business carried on by another person. This definition is not intended to include small-scale traditional fundraising activities that would normally be undertaken by charities, or charitable activities merely done on a cost recovery or nominal fee basis (such as an opportunity shop or soup kitchen).

New subsection 48C(5) provides that the non-profit exemption is not available for a commercial or competitive activity, regardless of how the funds from that activity are applied. This is designed to ensure that merely raising money for a charity is not in itself sufficient to attract the non-profit exemption.

New subsection 48C(6) clarifies that the non-profit exemption is not available for a commercial or competitive activity, even if that activity is charitable at common law.

New section 48D clarifies that an entity’s purpose is not merely defined by stated purposes or objects, but also its actual activities and all of the other relevant circumstances of the matter. This is designed to ensure that an entity is not charitable merely because it says it is, but because it actually undertakes activities in support of that purpose.

New section 48E enables the Commissioner of Territory Revenue to override the exclusions outlined by new subsections 48A(3)(f) or (g) in special circumstances. For clarity, this discretion will be subject to the objection and appeals provisions at Part 11 of the Taxation Administration Act.

Subsection 48E(1) allows the Commissioner to make a declaration deeming an entity that would otherwise be excluded as a trade, industry or commerce entity or professional association, to be a non-profit entity.

Subsection 48E(2) provides that the Commissioner can only make such a declaration if satisfied that special reasons exist. It is not intended that the Commissioner override the exclusions outlined in section 48A for entities that have a purpose of trade, industry or commerce, or professional associations, in ordinary or usual circumstances.

Subsection 48E(3) prescribes the factors that the Commissioner may have regard to in making a declaration under 48E(1). These include:
·	the significance of the excluding feature. In general, it is expected that an entity with a significant (or not insignificant) excluding feature is unlikely to receive the declaration, regardless of its other activities;

·	the significance of an entity’s charitable purposes. An entity with a significant purpose that is beneficial to the community, in a way that is not related to its excluding features, may be able to receive the declaration if other circumstances do not suggest otherwise; and

·	the beneficiaries of the entity’s activities. In general, it is expected that an entity which only benefits a narrow class of people or entities will be less likely to receive the declaration. The characteristics of the beneficiaries may also be relevant, as, for example, an entity which does not provide benefits (or direct benefits) to vulnerable sectors of the community may be less likely to receive the declaration.

The Commissioner may also consider any other relevant factors in deciding whether to make the declaration.

Subsection 48E(4) allows the Commissioner to make a declaration at any time after these amendments become effective on 1 July 2015.

Subsection 48E(5) allows the Commissioner to revoke determinations by written notice.

Subsection 48E(6) provides that the date of revocation does not have to be the same as the date of the notice of revocation. A backdated revocation may occur in numerous circumstances, but could occur where new information becomes available to the Commissioner at a later date that indicates that the past declaration was not appropriate, or was not appropriate from a certain date.

Subsection 48E(7) defines the term ‘excluding feature’, for the purposes of section 48E only, as meaning a purpose, object or activity of the entity that would, but for a determination under section 48E, cause it to be an excluded entity. 

Clause 18.		Section 52 amended

Clause 18 makes a consequential amendment to section 52 as a result of section 48 being replaced.

Clause 19.		Part 11 heading replaced

This clause makes an amendment to the heading at Part 11 to reflect the insertion of new transitional provisions into the Payroll Tax Act and to group all of the transitional provisions for that Act under one Part.

Clause 20.		Part 12 heading replaced

Clause 20 inserts new Division 2 into Part 11of the Payroll Tax Act, containing the transitional provisions for the Revenue Legislation Amendment Act 2011.

Clause 21.		Part 11, Division 3 inserted

Clause 21 inserts Division 3 into Part 11 containing transitional provisions at sections 116, 117 and 118.

Section 116 inserts the new defined term ‘2015 Act’.

New section 117 relates to the amendments made to the contractor provisions at section 32 of the Payroll Tax Act and provides that wages paid or payable prior to 1 July 2015 continue to be taxed under the provisions as in place prior to the commencement of this Act.

New section 118 relates to the amendments made to the non-profit entity provisions at section 48 of the Payroll Tax Act and provides that wages paid or payable prior to 1 July 2015 continue to be taxed under the provisions as in place prior to the commencement of this Act.

Clause 22.		Schedule 2 amended

Clause 22 deletes Schedule 2, clauses 17 and 18 from the Payroll Tax Act to remove the apprentices and trainees payroll tax exemption effective from 1 July 2015.

PART 5 – AMENDMENT OF STAMP DUTY ACT

Clause 23.		Act amended

Clause 23 provides that the Act being amended by this Part is the Stamp Duty Act.
Clause 24.		Section 88 amended

Clause 24 amends subsection (b) of the definition of ‘senior, pensioner and carer concession’ to increase the concession to $10 000 for conveyances first executed on or after 28 April 2015.

The amended definition also provides that conveyances first executed before 28 April 2015 are not eligible for the increased concession of $10 000 however are still eligible for the concession of $ 8 500.

Clause 25.		Part 11 inserted

Clause 25 inserts new Part 11, and new sections 107 and 109 into the Stamp Duty Act.

Section 107 provides the defined term ‘amending act’ for the purposes of Part 11 only.

Section 109(1) is a transitional provision to ensure the increased stamp duty concession for seniors, pensioners and carers does not apply to transactions entered into on or after 28 April 2015 if:
·	The contract replaces an earlier contract to purchase the same or substantially similar land that was made before 28 April 2015;

·	The purchaser had an option to purchase the same or a substantially similar land that was granted before 28 April 2015;

·	The vendor had an option, granted before 28 April 2015, to require the purchaser to purchase the same or substantially similar land.

Section 109(2) provides that if a transaction described in section 109(1) takes place, the amount of the senior, pensioner and carer concession is equal to the lesser of the total amount of duty assessed as payable on the transaction or $8 500.

Clause 26.		Section 89A amended

Clause 26 inserts new subsection 89A(11AA), which, from 28 April 2015, amends the residence requirement for the senior, pensioner and carer concession.

New subsection 89A(11AA) provides that a conveyee will not be subject to the requirement to occupy the property for a continuous period of six months, if at least one conveyee who is a senior, or holder of an NT Pensioner and Carer Concession card, complies with the residence requirement. For clarity, the amendments do not affect the Commissioner’s ability to exercise the discretion contained in existing section 89A(11).

Clause 27.		Section 90 amended

Clause 27 inserts new subsection 90(8A) which from 28 April 2015 amends the principal place of residence rebate.

New subsection 90(8A) provides that a conveyee will not be subject to the requirement to occupy the property for a continuous period of six months, if at least one other conveyee complies with the residence requirement. For clarity, the amendments do not affect the Commissioner’s ability to exercise the discretion contained in existing section 90(8).

Clause 28.		Schedule 2 amended

This clause amends Schedule 2, clause 23(b) to ensure that conveyances of motor vehicles between parents and stepchildren, by way of gift, are exempt from duty.

Clause 29.		Section 4 amended

Clause 29 makes a number of amendments to the definitions contained in section 4 of the Stamp Duty Act to reflect the cessation of life insurance stamp duty from 1 July 2015.

Subclause (1) omits the defined term ‘life insurance’ from section 4.

Subclause (2) inserts into section 4, defined terms ‘accident insurance’, ‘life insurance’ and ‘life insurance rider’. These three definitions are signposted to new section 37A of the Stamp Duty Act.

Subclause (3) makes a minor drafting amendment to the definition of insurance contained in section 4 to accommodate reference to ‘life insurance rider’.

Subclause (4) amends section 4 of the Stamp Duty Act, definition of insurance, to include the new term ‘life insurance rider’. This amendment is one of a number made to clarify that life insurance riders are taxed at general insurance rates.

Subclause (5) consequentially amends section 4(5) of the Stamp Duty Act to remove reference to the term ‘life policy’.

Clause 30.		Section 9 amended

Clause 30 makes a minor consequential amendment to section 9(3)(b) of the Stamp Duty Act to remove reference to ‘life insurance’.

Clause 31.		Section 37A inserted

Clause 31 inserts new section 37A, containing the new life insurance and life insurance rider provisions.

New subsection (1) provides the defined terms ‘accident insurance’, and ‘life insurance’.

Accident insurance is given a specific meaning which clarifies that it does not form part of life insurance and is therefore taxed as general insurance. Life insurance is defined as insurance providing the payment of benefits on death, or on the happening of a contingency dependent upon the termination or continuance of human life.

New subsection (2) provides that where a life policy also provides for the payment of benefits which are in addition to life insurance, the additional insurance is considered to be a ‘life insurance rider’ and not life insurance, and therefore is taxed as general insurance.

New subsection (3) provides that a policy additional to a life policy will be considered a life insurance rider, whether or not the rider and policy are separate and distinct matters and whether or not payment of money under the life insurance rider component will or may reduce the amount of money payable under the life insurance component of the policy or if such payment will or may terminate the policy.

New subsection (4) enables the Commissioner to apportion the amount or proportion of a premium or other amount that relates to a life insurance rider where the distinction between the life policy and rider cannot be made, or amounts have not been correctly apportioned to the rider by the insurer. 

Clause 32.		Section 38 amended

Clause 32 amends section 38 of the Stamp Duty Act to ensure that stamp duty is payable on a life insurance rider in respect of a person whose principal place of residence is in the Territory.

Clause 33.		Part 3 Division 7 repealed

Clause 33 repeals Part 3, Division 7 of the Stamp Duty Act which required the registration of life insurers in the Territory, due to stamp duty no longer being imposed on life insurance policies.

Clause 34.		Section 49A replaced

Clause 34 replaces section 49A with new section 49A to ensure that Part 3, Division 7A, relating to the apportionment of insurance premiums for the purpose of duty, between the Territory and other jurisdictions, applies to both general insurance and life insurance riders.

Clause 35.		Section 49B amended

Clause 35 makes consequential amendments to section 49B to remove references to ‘life insurance’.

Clause 36.		Section 49C amended

Clause 36 makes a minor consequential amendment to section 49C to remove a reference to ‘life policy’ in section 49C(3).

Clause 37. 	Section 110 inserted

Clause 37 inserts new section 110 into the Stamp Duty Act to provide a transitional provision for the abolition of duty on life insurance policies.

Subclause (1) clarifies that the amendments concerning life insurance and life insurance riders apply only to life policies or life insurance riders issued on or after 1 July 2015. For group life insurance policies, the amendments apply to the extent the policy relates to members who join the group on or after 1 July 2015, regardless of when the policy was issued.

Subclause (2) provides that life policies issued before 1 July 2015, as defined in the Stamp Duty Act in force immediately before the enactment of the Revenue and Other Legislation Amendment Act 2015, continue to be subject the Stamp Duty Act as in force when the policy was issued. For group life insurance policies, the amendments do not apply to the extent the policy relates to members who joined the group before 1 July 2015, regardless of when the policy was issued.

Subclauses (1) and (2) clarify that life insurance policies issued before 1 July 2015 remain subject to duty under the former regime. Likewise, policies of life insurance on which duty was paid prior to 1 July 2015 are not subject to the life insurance rider (or other) changes made under these amendments.

Subclause (3) provides that a person who was registered as a life insurer immediately prior to 1 July 2015 is taken to be an Australian insurer registered under section 41 of the Stamp Duty Act. This prevents the need for life insurers to re-register for duty purposes as a result of the amendments.

Subclause (4) inserts a definition of ‘group life insurance policy’ to refer to policies that insure classes of people, whose membership may change over time.

Clause 38.		Schedule 1 amended

Subclauses (1) and (2) consequentially amend Schedule 1 clause 6 of the Stamp Duty Act to remove references to policies of life insurance.

Subclause (3) inserts new subsection (4) into Schedule 1 clause (6) to ensure that duty on a policy of insurance that is a life insurance rider is calculated in accordance with Schedule 1 clause (6)(3), at the existing rate of duty imposed for general insurance policies.

Clause 39.		Schedule 2 amended

Clause 39 consequentially amends Schedule 2, clause 22A to remove reference to the first home saver accounts under the First Home Saver Accounts Act 2008 (Cth) as this scheme is no longer in operation, and to ensure life insurance is not subject to duty.

Clause 40.		Section 4A amended

Subclause (1) amends section 4A(4)(c) of the Stamp Duty Act so that, for the purpose of determining ‘unencumbered value’, an encumbrance includes any agreement or arrangement (including a lease) that has the effect of reducing the value of the property unless the Commissioner is satisfied that the agreement or arrangement was not made for a purpose (collateral or otherwise) of reducing the value of the property.

Subclause (2) omits subsections (c)(i) and (ii) as a result of the amendments to subsection (4)(c) by the Bill.

New subsection (4A) is inserted by subclause (3) to allow the Commissioner to have regard to certain factors for the purpose of determining whether an agreement or arrangement was created or entered into for a purpose of reducing the value of property.

New subsections (4A)(a)–(f) set out the factors which the Commissioner may have regard to in being satisfied whether or not an agreement was created or entered into for a purpose (collateral or otherwise) of reducing the value of property under section 4A(4)(c). These include:
·	the length of time between the agreement or arrangement being made and the conveyance;

·	whether the parties to the agreement or arrangement are or have been associates;

·	whether the parties to the agreement or arrangement are or have been dealing with each other at arm's length;

·	whether there is any commercial efficacy to the making of the agreement or arrangement other than to reduce the value of the property;

·	whether the agreement or arrangement is in favour of the conveyee or an associate of the conveyee; and

·	any other matters the Commissioner considers relevant.

Clause 41.		Section 108 inserted

New section 108 is inserted by clause 41 and contains transitional provisions regarding the amendments to section 4A.

Subclause (1) ensures that section 4A as amended applies in relation to a conveyance of dutiable property first executed on or after 1 July 2015. 

Subclause (2) ensures that section 4A, as in force before commencement, continues to apply in relation to a conveyance of dutiable property first executed before 1 July 2015.

Clause 42.		Part 5, Division 3A inserted

Clause 42 inserts new Division 3A into Part 5, which concerns conveyances relating to statutory trusts for sale or partition taking place on or after 1 July 2015.

New section 91A exempts from duty conveyances giving effect to a statutory vesting of property in a trustee of a statutory trust for sale, or a statutory trust for partition, under section 40 of the Law of Property Act.

New section 91B relates to a conveyance of dutiable property from statutory trusts for sale to a beneficial owner. For clarity, section 91B does not apply to trusts for partition, as item 1(4) of Schedule 1 to the Stamp Duty Act outlines the assessment process for partitions.

Under new section 91B, duty is assessed on a conveyance from a trustee of a statutory trust for sale to a beneficial owner on a pro rata basis, by deducting from the unencumbered value of the property or the consideration of the property (whichever is greater) the proportion of that amount that is the same as the proportion of the conveyee’s beneficial interest in the property immediately before the conveyance.

By way of example, if a trust for sale is declared over a property that is owned by two people in 50 per cent equal shares, and the outcome of the sale is that one of the former owners becomes the sole owner of that property, new section 91B will operate so that the purchaser is only subject to duty on the additional 50 per cent interest acquired, not the whole value of the property.

Clause 43.		Schedule 2 amended

Subclause (1) amends Schedule 2, clause 22 to ensure that health insurance contracts held by overseas students and temporary visa holders are exempt from duty.

Subclause (2) inserts Schedule 2, clauses 22B and 22C to ensure that authorised Residential Building Insurance policies or fidelity certificates, issued in accordance with Part 5A of the Building Act, are exempt from duty.

PART 6 – AMENDMENT OF TAXATION ADMINISTRATION ACT
 
Clause 44.		Act amended

Clause 44 provides that this Part of the Bill amends the Taxation Administration Act.

Clause 45.		Section 25 amended

Clause 45 amends section 25 of the Taxation Administration Act to clarify the Commissioner’s powers in relation to requiring, obtaining or adopting valuation material for the purpose of determining whether a person is liable to pay tax or a person’s tax liability.

Subclause (1) replaces existing subsections 25(1) – (4) with new subsections (1) and (2) to remove redundant wording and clarify that the Commissioner may obtain a valuation for any matter (whether or not a taxpayer fails to provide a valuation, or if the Commissioner is satisfied with a valuation), and may adopt a valuation prepared for any purpose, including a non-taxation valuation.

New subsection (2) is a consequential amendment as a result of the redrafting of section 25.

Subclause (3) consequentially amends section 25(5).

Subclause (4) inserts new subsection 25(7) to define the term ‘valuation cost’. This is to ensure that costs incidental or subsequent to a valuation may also be recovered if the circumstances outlined in new subsection (2), which continues to act as a check on the Commissioner’s recovery power, is satisfied. Costs incidental to obtaining or adopting a valuation may include critiques, expert evidence and additional analysis.

PART 7 – EXPIRY OF ACT

Clause 46.		Expiry of Act

Clause 46 provides for the expiry of the Revenue and Other Legislation Amendment Act 2015 the day after it commences.