2011

LEGISLATIVE ASSEMBLY OF THE
NORTHERN TERRITORY

TREASURER

REVENUE LEGISLATION AMENDMENT BILL 2011
SERIAL NO. 164

EXPLANATORY STATEMENT

GENERAL OUTLINE

This Bill amends various Acts within the Treasurer’s Portfolio. The changes made by the Bill form part of the 2011-12 Budget and take effect from 1 July 2011 unless otherwise indicated.

The Stamp Duty Act is amended to:

·	apply a rate of 5.45 per cent to conveyances where the unencumbered value of the dutiable property or the consideration payable is $3 million or more;

·	from 3 May 2011 to provide the Commissioner of Territory Revenue with the discretion to waive, in special circumstances, the requirement of the stamp duty home incentive schemes that a person occupy a home as their principal place of residence;

·	extend the ability to provide a stamp duty refund for conveyances of matrimonial property due to the breakdown of a de facto relationship or pursuant to a binding financial agreement under the Family Law Act; and

·	clarify that instruments are considered to be duly stamped where duty is paid under a returns-based arrangement.

The Payroll Tax Act is amended to:

·	reduce the payroll tax rate to 5.5 per cent; 

·	replace the existing $1.25 million exemption with a $1.5 million deduction that reduces by $1 for every $4 that an employer’s (or a group’s) wages are above $1.5 million; and

·	update the employee share scheme provisions as a result of Commonwealth income tax changes. This is based on harmonised legislation developed in consultation with the other states.

The First Home Owner Grant Act is amended from 3 May 2011 to provide the Commissioner with the discretion to waive, in special circumstances, the requirement that a person occupy a home as their principal place of residence to receive the first home owner grant. 

The Taxation Administration Act is amended to provide the Commissioner with the discretion to reduce or waive interest on instalment arrangements in special circumstances.

Also various pieces of redundant taxation legislation are repealed by the Bill. 

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 Legislation Amendment Act 2011.

Clause 2.	Commencement

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

Subclause (1) provides that Part 2 of the Act, which relates to changes to the first home owner grant residence requirements and stamp duty home incentive occupancy requirements, will commence on 3 May 2011.

Subclause (2) provides that the remainder of the Act commences on 1 July 2011.  

PART 2 – AMENDMENT OF FIRST HOME OWNER GRANT AND STAMP DUTY LEGISLATION TO CHANGE RESIDENCE AND OCCUPANCY REQUIREMENTS

Division 1 – Amendment of First Home Owner Grant Act

Clause 3.	Act amended

The Act being amended by this Division is the First Home Owner Grant Act.

Clause 4.	Section 3 amended

This clause makes a consequential amendment to the definition of “residence requirements” in section 3 of the First Home Owner Grant Act by replacing the reference to specific subsections formerly in section 12 with a reference to section 12 generally as a result of amendments made by clause 5 of this Bill.

Clause 5.	Section 12 replaced

This clause replaces existing section 12 of the First Home Owner Grant Act with a new section 12 that has the same residence requirements for the first home owner grant. This requires the applicant to:

·	commence occupation of the home as their principal place of residence within 12 months after completion of the eligible transaction (section 13(6) of the First Home Owner Grant Act provides for when an eligible transaction is completed); and

·	occupy the home as their principal place of residence for a continuous period of at least six months.

The Commissioner’s existing discretion to extend the period of time in which an applicant must commence occupation of the home and/or to reduce the period of time an applicant must occupy the home is also replicated by new section 12(3)(a) of the First Home Owner Grant Act.

However, new section 12(3)(b) of the First Home Owner Grant Act extends the Commissioner’s existing ability to exempt an applicant from the residence requirements. Currently, the only circumstances where an applicant can be exempted from the residence requirements is where the applicant has died, or if there is more than one applicant, where at least one of the applicants will fulfil the residence requirements.

This ability has been extended in recognition that there may be circumstances where an applicant is unable to commence occupation of a home due to a significant change in circumstances after the purchase of the home. For example, a person’s home could be destroyed by a natural disaster before they can commence occupation and the time it takes to rebuild the home may be unclear.

As another example, an applicant who is a permanent member of the Australian Defence Force may be posted overseas after purchasing their first home, but prior to occupying the home, and they may not return to the Northern Territory.

In considering whether to exercise the discretion to exempt an applicant, the Commissioner will consider the circumstances of each case. Bearing in mind the policy intention of the first home owner grant, if there is more than one applicant and at least one of the applicants will fulfil the residence requirements, the Commissioner is more likely to exercise this discretion.

Where none of the applicants will satisfy the residence requirements, the Commissioner must be satisfied that more exceptional circumstances exist that prevent their occupation of the home as a principal place of residence. 

Clause 6.	Section 17 amended

This clause makes a consequential amendment to section 17(3) of the First Home Owner Grant Act as a result of amendments made to section 12 of the First Home Owner Grant Act by clause 5 of this Bill.

Clause 7.	Section 30A inserted

This clause inserts new section 30A into the First Home Owner Grant Act. New section 30A clarifies that there is no time limit as to when the Commissioner may exercise the discretion to approve:

·	an extension of the time in which an applicant must commence occupation of the home as their principal place of residence; and/or

·	a reduction of the period of time for which an applicant must occupy the home as their principal place of residence. 

That is, the Commissioner may exercise either of these discretions even after a person has initially failed to meet the residence requirements. 

Similarly, there is no time limit as to when the Commissioner may exercise the new discretion to exempt an applicant from the residence requirements in special circumstances (as outlined in clause 5 of this Bill and new section 12(3)(b) of the First Home Owner Grant Act in particular).

Division 2 – Amendment of Stamp Duty Act

Clause 8.	Act amended

The Act being amended by this Division is the Stamp Duty Act.

Clause 9.	Section 89 amended

Subclause (1) makes a minor consequential amendment to section 89(1)(k)(ii) of the Stamp Duty Act as a result of the insertion of new subsection (12) by subclause (3) below.

Subclause (2) omits existing section 89(2) as a consequence of the amendments also made by subclause (3) below.

Subclause (3) replaces existing section 89(11) with new sections 89(11) and (12).

Consistent with existing section 89(11), new section 89(11) outlines the Commissioner’s ability to provide an extension of the period for occupancy and/or a reduction of the prescribed period.

The terms “period for occupancy” and “prescribed period” are defined in section 88(1) of the Stamp Duty Act. Generally, a conveyee is required to occupy the home as their principal place of residence for the prescribed continuous period of at least six months, with the conveyee having a year in which to start the occupancy.

New section 89(11)(b) extends the Commissioner’s current ability to exempt a conveyee from the occupancy requirements for the purpose of the stamp duty first home owner concession.

Currently, the only circumstance where a conveyee can be exempted from the occupancy requirements is where there is more than one conveyee and at least one of the conveyees will fulfil the occupancy requirements.

New section 89(11)(b) extends this ability consistent with and for the same reasons as the amendments made by clause 5 of this Bill to extend the Commissioner’s ability to exempt a first home owner grant applicant from the residence requirements, where special reasons exist.

In considering whether to exempt a conveyee from the occupancy requirements for the first home owner concession, the Commissioner will consider the circumstances of each case, including whether any of the other conveyees will satisfy those requirements.

New section 89(12) replaces existing section 89(11)(c) of the Stamp Duty Act and largely replicates that provision.

Clause 10.	Section 89A amended

Subclause (1) makes a minor consequential amendment to section 89A(1)(i)(ii) of the Stamp Duty Act as a result of the insertion of new subsection (11A) by subclause (3) below.

Subclause (2) omits existing section 89A(2) as a consequence of the amendments also made by subclause (3) below.

Subclause (3) replaces the existing section 89A(11) with new sections 89(11) and (11A) to extend the Commissioner’s ability to exempt an applicant from the occupancy requirements of the stamp duty senior, pensioner and carer concession. This is done in a manner consistent with the amendments made by clause 9 of the Bill to the first home owner concession. 

In considering whether to exempt a conveyee from the occupancy requirements for the senior, pensioner and carer concession, the Commissioner will look at the circumstances of all conveyees including whether any other conveyee will satisfy the occupancy requirements.

If one of the conveyees will fulfil the occupancy requirements, the Commissioner will consider whether that conveyee also meets the criteria outlined in section 89A(1)(b) of the Stamp Duty Act. Section 89A(1)(b) conditions eligibility to the senior, pensioner and carer concession on at least one of the conveyees being either 60 years of age or older or a holder of an NT Pensioner and Carer Concession Card. 

Clause 11.	Section 90 amended

Subclause (1) makes a minor consequential amendment to section 90(1)(g)(ii) of the Stamp Duty Act as a result of the insertion of new subsection (9) by subclause (3) below.

Subclause (2) omits existing section 90(2) as a consequence of the amendments also made by subclause (3) below.

Subclause (3) replaces existing section 90(8) with new sections 90(8) and (9) to extend the Commissioner’s ability to exempt an applicant from the occupancy requirements of the stamp duty principal place of residence rebate. This is done in a manner consistent with the amendments made by clauses 9 and 10 of the Bill to the first home owner concession and senior, pensioner and carer concession (respectively).

Clause 12.	Part 9 inserted 

This clause inserts new “Part 9 Transitional matters for Revenue Legislation Amendment Act 2011”, containing new section 105, into the Stamp Duty Act. 

New section 105 allows the Commissioner to assess or reassess stamp duty on matters occurring before 3 May 2011 as if the Commissioner had prior to 3 May 2011, the discretion to waive the occupancy requirements of the stamp duty home incentive schemes.

This is subject to there being special reasons to do so and an application being made with the Commissioner within the five year period allowed for reassessments.

PART 4 – AMENDMENT OF PAYROLL TAX ACT

Clause 13.	Act amended

The Act being amended by this Part is the Payroll Tax Act.

All states and territories have worked together in relation to the amendments to the payroll tax employee share scheme provisions (Part 3, Division 4 of the Payroll Tax Act). These amendments are made by clauses 14 to 18 of the Bill.

Clause 14.	Section 3 amended

Subclause (1) removes the reference in the definition of “share” in section 3 of the Payroll Tax Act to a repealed provision of the Income Tax Assessment Act 1936 (Cth). As a result, a “stapled security” will have its ordinary meaning for the purposes of the definition, as it does in other pieces of legislation.

Subclause (2) inserts a definition for the term “granted” into section 3 to signpost that this term is defined in new section 19(2) of the Payroll Tax Act. 

Clause 15.	Section 18 amended

This clause replaces existing section 18(1) of the Payroll Tax Act with a new section 18(1). New section 18(1) provides that “wages” include the grant of a share or option to an employee by an employer for services performed by the employee. This is provided the share or option is:
·	an ESS interest within the meaning of the Income Tax Assessment Act 1997 (Cth); and
·	granted to the employee under an employee share scheme.
The Income Tax Assessment Act 1997 (Cth) provides that an ESS interest in a company is a beneficial interest in a share in the company or a right to acquire a beneficial interest in such a share.

The Income Tax Assessment Act 1997 (Cth) also provides that an employee share scheme is a scheme under which ESS interests in a company are provided to employees, or associates of employees, (including past or prospective employees) of the company or subsidiaries of the company in relation to the employees’ employment. 

The grant of a share or option to an employee that is not an ESS interest will be taxable as a fringe benefit under Division 2 of Part 3 of the Payroll Tax Act.

Clause 16.	Section 19 amended

This clause replaces existing sections 19(2), (3) and (4) of the Payroll Tax Act with new sections 19(2), (2A), (3) and (4).

As outlined in existing section 19(1) of the Payroll Tax Act, an employer can elect to treat either the date on which a share or option is granted to an employee or the vesting date for the share or option as the date on which the wages are taken to be paid for payroll tax purposes.

New sections 19(2) and (2A) set out the circumstances in which a share or option is taken to be granted to a person for the purpose of determining when payroll tax is payable. New sections 19(2) and (2A) replace existing section 19(2) which sets out those circumstances by reference to a repealed provision of the Income Tax Assessment Act 1936 (Cth). 

New sections 19(3) and (4), which replace existing sections 19(3) and (4), limits the period for the vesting day for a share or option to no more than seven years after a grant of a share or option by providing that the vesting date of a share or option is taken to be the date at the end of seven years after a grant of a share or option, if the vesting has not occurred before that date.

Clause 17.	Section 23 amended

Subclause (1) makes a minor consequential amendment to section 23(1) of the Payroll Tax Act as a result of the amendments made by subclause (2) below.

Subclause (2) replaces existing sections 23(2) to (5) of the Payroll Tax Act with new sections 23(2) to (7).

New section 23(2) provides that the value of shares or options is either the market value or the amount determined in accordance with the “Commonwealth income tax provisions”. The term “Commonwealth income tax provisions” is defined in new section 23 (7) below. 

New section 23(3) provides that an employer may elect the method by which the value of the share or option is determined in any return lodged by the employer.

However, new section 23(4) allows the Commissioner to determine the method used to value the share or option if the employer fails to include the grant of the share or option in a payroll tax return.

New section 23(5) provides that for the purpose of determining the market value of a share or option, anything that would effect the conversion of the share or option to money is to be disregarded.

New section 23(6) describes modifications to the “Commonwealth income tax provisions” referred to in new section 23(2).

New section 23(7) provides for the meaning of the term “Commonwealth income tax provisions”. It defines this term to mean section 83A-315 of the Income Tax Assessment Act 1997 (Cth) and the regulations made for that section.

Clause 18.	Section 24 amended

This clause makes consequential amendments to section 24 of the Payroll Tax Act to clarify that the grant of a share or option by a company to one of its directors (who is not an employee of the company) is to be taxed under Division 4 of Part 3 of the Payroll Tax Act unless the grant of the share or option is a fringe benefit.

Where the grant of the share or option is a fringe benefit it is to be taxed under Division 2 of Part 3 of the Payroll Tax Act. 

Clause 19.	Section 80 amended

This clause replaces the references to “$1 250 000” in sections 80(2)(a) and 80(3)(a) of the Payroll Tax Act with references to “$1 500 000”.  This is as a consequence of the threshold amount being increased from $1 250 000 to $1 500 000 by clauses 23(2) and 24(4) of this Bill. 

Section 80(2) of the Payroll Tax Act outlines when a member of a group is regarded as a qualified member of a group. A qualified member of a group will be a member that has either paid wages in the preceding financial year that exceeds the threshold amount or a member that is likely to pay wages during the current financial year that exceeds that amount.

Section 80(3) of the Payroll Tax Act provides that where no member of a group is a qualified member, but together the members have either paid wages in the preceding financial year that exceed the threshold amount, or the members are likely to pay wages during the current financial year that exceed the threshold amount, with the approval of the Commissioner, any member of the group can be the designated group employer.

Clause 20.	Section 86 amended

Subclause (1) makes a minor amendment to sections 86(1)(a) and (b) to replace the figure $24 030 with the term “the weekly threshold amount”. 

Subclause (2) defines the term “weekly threshold amount” by use of a formula that represents 1/52 of the threshold amount. 

Clause 21.	Part 10 heading amended

This clause makes a minor amendment to the heading of Part 10 of the Payroll Tax Act. 

Clause 22.	Part 12 inserted

This clause inserts new Part 12 “Transitional provisions for Revenue Legislation Amendment Act 2011” into the Payroll Tax Act, containing new sections 114 and 115. New sections 114 and 115 relate to the amendments made to Part 3, Division 4 of the Payroll Tax Act by clauses 14 to 18 of this Bill.

New section 114 validates any act or omission of an employer relating to the assessment or payment of payroll tax for wages paid or payable for the period 1 July 2009 to before 1 July 2011 where the act or omission would have been valid had the amendments made to Part 3, Division 4 of the Payroll Tax Act by clauses 14 to 18 of this Bill been in force at the time. 

New section 115 ensures the continued operation of Part 3, Division 4 in relation to a share or an option granted before 1 July 2011 if when granted, the share or option constituted wages under Part 3, Division 4 of the Payroll Tax Act and the employer elected the vesting day as the relevant day and that day occurs after 1 July 2011. This is regardless of whether the grant of the share or option continues to constitute wages under Part 3, Division 4 after the commencement of the amendments made by clauses 14 to 18 of this Bill. 

Clause 23.	Schedule 1 amended

This clause amends Schedule 1 of the Payroll Tax Act to reduce the payroll tax rate from 5.9 per cent to 5.5 per cent and to replace the existing $1 250 000 payroll tax exemption with a $1 500 000 deduction that reduces by $1 for every $4 that an employer’s (or group’s) wages are above $1 500 000.

This means that an employer (or group) paying wages of $1 500 000 or less in a financial year will not be required to pay payroll tax in the Territory and that the deduction will amount to zero for an employer (or group) who pays wages of $7 500 000 or more. As a result, an employer (or group) who pays wages of $7 500 000 or more will pay payroll tax on their total Territory wages. 

Subclause (1) amends clause 1 of Schedule 1 to the Payroll Tax Act to reduce the payroll tax rate from 5.9 per cent to 5.5 per cent. 

Subclause (2) replaces the reference to $1 250 000 in clause 1 of Schedule 1 to the Payroll Tax Act with a reference to $1 500 000, to increase the existing threshold amount from $1 250 000 to $1 500 000. This means that an employer (or group) paying wages of $1 500 000 or less in a financial year will not be required to pay payroll tax in the Territory.  

Subclause (3) inserts a new definition for the term “AD or annual deduction” into clause 3 of Schedule 1 to the Payroll Tax Act. This term is defined to mean the greater of zero and the amount calculated in the formula outlined in paragraph (b) of that definition. 

The formula in paragraph (b) reduces the threshold amount by $1 for every $4 of wages that an employers pays over the threshold amount and results in a negative amount or zero where the employer pays wages of $7 500 000 or more. Where this is the case, the “AD or annual deduction” is taken to be zero as outlined in paragraph (a) of that definition. This means that an employer who pays wages of $7 500 000 or more will pay payroll tax on their total Territory wages.

The amount representing the “AD or annual deduction” under clause 3 of Schedule 1 to the Payroll Tax Act will be used in the formula in clause 5 of Schedule 1 to the Payroll Tax Act (as amended by subclause (4) below) which calculates the payroll tax liability of an employer who is not a member of a group who pays wages of more than $1 500 000. 

Subclause (4) replaces the term “TA” in the formula contained in clause 5 of Schedule 1 of the Payroll Tax Act with a reference to “AD”. 

The amended formula results in the annual payroll tax liability of an employer who pays over $1 500 000 in wages who is not a member of a group being worked out as follows:

·	calculating the AD or annual deduction under clause 3 of Schedule 1;

·	where the employer has paid both Territory and interstate wages in the financial year, adjusting the AD or annual deduction to reflect the portion of Territory wages to the total combined Territory and interstate wages; 

·	where the employer has not paid wages for the full financial year, adjusting (or further adjusting) that amount to reflect the portion of the year that wages were paid for;

·	deducting the resultant amount (i.e. the annual deductible amount) from the employer’s Territory wages;

·	multiplying that amount by the payroll tax rate.

This is very similar to the current formula for calculating the payroll tax liability of an employer who is not a member of a group, which requires the current threshold amount of $1 250 000 (commonly referred to as the “General Exemption Deduction”) to be adjusted to reflect the portion of the employer’s Territory wages to their total combined Territory and interstate wages and to take into account the portion of the year that wages were paid by the employer.

For example, if an employer who is not a group member pays Territory wages of $2 000 000 and interstate wages of $1 500 000, the annual deduction calculated in accordance with clause 3 of Schedule 1 to the Payroll Tax Act would be $1 000 000. 

As the Territory wages represent about 57 per cent of the wages paid by the employer, the formula contained in clause 5 of Schedule 1 to the Payroll Tax Act would then reduce that amount to give an annual deductible amount of $571 429. If the employer paid wages for the full financial year, this amount would then be deducted from the employer’s Territory wages ($2 000 000 less $571 429).

The resultant figure of $1 428 471 would then be multiplied by the new payroll tax rate of 5.5 per cent. The employer’s payroll tax liability for the year would therefore be $78 566.

Subclause (5) inserts a new definition for the term “AD or annual deduction” into clause 7 of Schedule 1 to the Payroll Tax Act. This term is defined to mean the greater of zero and the amount calculated in the formula outlined in paragraph (b) of that definition. 

The formula in paragraph (b) reduces the threshold amount by $1 for every $4 of wages that a group pays over the threshold amount and results in a negative amount or zero where the group pays wages of $7 500 000 or more. Where this is the case, the “AD or annual deduction” is taken to be zero as outlined in paragraph (a) of that definition. This means that a group who pays wages of $7 500 000 or more will pay payroll tax on their total Territory wages.

The amount representing the “AD or annual deduction” under clause 7 of Schedule 1 of the Payroll Tax Act will be used in the formula in clause 9(2) of Schedule 1 to the Payroll Tax Act (as amended by subclause (6) below) which calculates the payroll tax liability of a designated group employer of a group who pays wages above the threshold amount who has obtained the Commissioner’s approval to calculate payroll tax under clause 9 of Schedule 1 of the Payroll Tax Act rather than clause 14 of Schedule 2 to the Payroll Tax Act. 

Subclause (6) replaces the term “TA” in the formula contained in clause 9(2) of Schedule 1 to the Payroll Tax Act with a reference to “AD”. 

The amended formula results in the annual payroll tax liability of a designated group employer of a group who pays wages above the threshold amount, and the group has obtained the Commissioner’s approval to calculate payroll tax under clause 9 of Schedule 1 to the Payroll Tax Act rather than clause 14 of Schedule 2 to the Payroll Tax Act, being worked out as follows:

·	calculating the AD or annual deduction under clause 7 of Schedule 1;

·	where any group member has paid interstate wages in the financial year, adjusting the AD or annual deduction to reflect the portion of the group’s total Territory wages to the groups total combined Territory and interstate wages; 

·	where there is a period in the financial year where no group member has not paid wages, adjusting (or further adjusting) that amount to reflect the portion of the year that wages were paid by the group;

·	deducting the resultant amount (i.e. the annual deductible amount) from the Territory wages of the designated group employer;

·	multiplying that amount by the payroll tax rate.

This is very similar to the current formula for calculating a designated group employer’s payroll tax liability under clause 9 of Schedule 1 of the Payroll Tax Act, which requires the current threshold amount of $1 250 000 (commonly referred to as the “General Exemption Deduction”) to be adjusted to reflect the portion of the group’s Territory wages to the group’s total combined Territory and interstate wages and to take into account the portion of the year that wages were paid by any member of the group.

Where a group’s annual payroll tax liability is calculated under clause 9 of Schedule 1 to the Payroll Tax Act, the annual payroll tax liability of the other group members is still calculated under clause 9(3) of Schedule 1 to the Payroll Tax Act.

Clause 24.	Schedule 2 amended

This clause amends Schedule 2 of the Payroll Tax Act to reduce the payroll tax rate from 5.9 per cent to 5.5 per cent and to replace the existing $1 250 000 payroll tax exemption with a $1 500 000 deduction that reduces by $1 for every $4 that an employer’s (or group’s) wages are above $1 500 000.

Subclause (1) amends clause 3 of Schedule 2 to the Payroll Tax Act to reduce the payroll tax rate from 5.9 per cent to 5.5 per cent. 

Subclause (2) makes consequential amendments to clause 6(1) and 10(1) of Schedule 2 to the Payroll Tax Act as a result of the existing $1 250 000 payroll tax exemption being replaced with a $1 500 000 deduction that reduces by $1 for every $4 that an employer’s (or group’s) wages are above $1 500 000.

Subclause (3) replaces the term “TA” in the formula contained in clause 14(2) of Schedule 2 to the Payroll Tax Act with a reference to “AD”. 

The amended formula results in the annual payroll tax liability of a group who pays wages above the threshold (other than groups who have obtained the Commissioner’s approval to calculate payroll tax under clause 9 of Schedule 1 to the Payroll Tax Act) being worked out as follows:

·	calculating the AD or annual deduction as defined in clause 14(3) of Schedule 2 to the Payroll Tax Act;

·	where any group member has paid interstate wages in the financial year, adjusting the AD or annual deduction to reflect the portion of the group’s total Territory wages to the groups total combined Territory and interstate wages; 

·	where there is a period in the financial year where no group member has not paid wages, adjusting (or further adjusting) that amount to reflect the portion of the year that wages were paid by the group;

·	deducting the resultant amount (i.e. the annual deductible amount) from the group’s total Territory wages;

·	multiplying that amount by the payroll tax rate.

This is very similar to the current formula for calculating a group’s payroll tax liability under clause 14 of Schedule 2 to the Payroll Tax Act which also requires the current threshold amount of $1 250 000 (commonly referred to as the “General Exemption Deduction”) to be adjusted to reflect the portion of the group’s Territory wages to the group’s total combined Territory and interstate wages and to take into account the portion of the year that wages were paid by any member of the group.

Subclause (4) removes the current definitions of the variables used in the current formula in clause 14(2) of Schedule 2 to the Payroll Tax Act and inserts them into a new clause 14(3) of Schedule 2 to the Payroll Tax Act. 

The current definitions for the variables “TA or threshold amount” and “R” are also amended so that the existing threshold amount increases from $1 250 000 to $1 500 000 and the current payroll tax rate reduces from 5.9 per cent to 5.5 per cent. 

Subclause (4) also inserts a new definition for the term “AD or annual deduction” into new clause 14(3) of Schedule 2 to the Payroll Tax Act. This term is defined to mean the greater of zero and the amount calculated in the formula outlined in paragraph (b) of that definition. 

The formula in paragraph (b) reduces the threshold amount by $1 for every $4 of wages that a group pays over the threshold amount and results in a negative amount or zero where the group pays wages of $7 500 000 or more. This means that a group who pays wages of $7 500 000 or more will pay payroll tax on their total Territory wages.

The amount representing the annual deduction under clause 14(3) of Schedule 2 is used in the formula in clause 14(2) of Schedule 2 to the Payroll Tax Act which calculates the payroll tax liability of a group who pays wages above the threshold amount (other than groups who has obtained the Commissioner’s approval to calculate payroll tax under clause 9 of Schedule 1 to the Payroll Tax Act).

PART 5 – AMENDMENT OF STAMP DUTY LEGISLATION

Division 1 – Amendment of Stamp Duty Act

Clause 25.	Act amended

The Act being amended by this Division is the Stamp Duty Act.

Clause 26.	Section 4 amended

This clause inserts new section 4(5) into the Stamp Duty Act to ensure that a policy of insurance is considered to be duly stamped :

·	when the duty imposed in relation to the policy has been paid; or

·	if the policy is exempt from duty or otherwise not liable to duty. 

Clause 27.	Section 56M amended

This clause makes a consequential amendment to section 56M(2A)(b) of the Stamp Duty Act consistent with the amendments made to section 91 of the Stamp Duty Act by clause 28 of this Bill.

Clause 28.	Part 5, Division 3 replaced

This clause replaces existing Part 5, Division 3 containing section 91 of the Stamp Duty Act (which provides an exemption from stamp duty to conveyances of matrimonial property where certain conditions are met), with a new Part 5, Division 3 containing new section 91.

New section 91(1) extends the existing exemption so that it applies in circumstances where the parties to the conveyance are or were parties to a marriage or a de facto relationship where an order is made under Parts VIII or Part VIIIAB of the Family Law Act 1975 (Cth) within 12 months of the conveyance and the terms of the conveyance being consistent with that order.

New section 91(2) extends the existing exemption to binding financial agreements under the Family Law Act 1975 (Cth) where: 

·	the parties to the conveyance are or were parties to a marriage or de facto relationship under the Family Law Act 1975 (Cth); and

·	the conveyance occurred after the irretrievable breakdown of the marriage or de facto relationship of the parties to the conveyance; and

·	within 12 months after the date of the conveyance, a binding financial agreement for the distribution of property between parties to the conveyance is made under Part VIIIA or Part VIIIAB of the Family Law Act 1975 (Cth); and

·	the terms of the conveyance are consistent with the binding financial agreement.

New section 91(3) replaces existing section 91(2), which requires stamp duty to be refunded if paid on a conveyance before it became exempt under new section 91(1) or (2).

Clause 29.	Schedule 1 amended

Subclause (1) makes a minor amendment to remove the reference to “ad valorem rate” from item 1(2) of Schedule 1 to the Stamp Duty Act, as these words are not necessary.

Subclause (2) amends item 1(2)(b) of Schedule 1 to the Stamp Duty Act to increase the stamp duty rate applying to conveyances to 5.45 per cent where the unencumbered value of the property or the consideration payable is $3 million or more.

Division 2 – Amendment of Taxation (Administration)
	Amendment Act 2003

Clause 30.	Act amended

The Act being amended by this Division is the Taxation (Administration) Amendment Act 2003.

Clause 31.	Sections 4 and 23 repealed

This clause repeals sections 4 and 23 of the Taxation (Administration) Amendment Act 2003 as these sections have not commenced and it is not intended that they will. 

PART 6 – AMENDMENT OF TAXATION ADMINISTRATION ACT

Clause 32.	Act amended

The Act being amended by this Part is the Taxation Administration Act.

Clause 33.	Section 41 amended

This clause makes a minor amendment to section 41(3) of the Taxation Administration Act to correct a minor error. 

Clause 34.	Section 56 amended

This clause inserts new section 56(4A) into the Taxation Administration Act to clarify that the Commissioner’s ability to remit interest, either wholly or in part where it is appropriate, extends to interest payable under an instalment arrangement. 

However, the Commissioner will only do so where satisfied that sufficient arrangements have been entered into to secure the payment of the outstanding liability.

Clause 35.	Part 9, Division 1, heading

This clause makes a minor amendment to the heading of Part 9 Division 1 of the Taxation Administration Act to correct a typographical error. 

PART 7 – OTHER MATTERS

Clause 36.	Repeals

This clause repeals the legislation specified in the Schedule to the Bill as these pieces of legislation are redundant.  

SCHEDULE – REPEALED ACTS

This Schedule specifies the Acts that are to be repealed by this Bill.