Duties, landholder duty and land tax changes

The Revenue Legislation Amendment Bill 2022¹ was passed by the ACT Legislative Assembly on 22 March 2023 and is now an Act effective from 12 April 2023 as:

Revenue Legislation Amendment Act 2023 (ACT) (the Act) . (Act Number: A2023-6).²

Different parts of the Act and Schedule 1 of the Act commence on different dates. The Act amends the ACT Duties Act 1999 (Duties Act) and the ACT Land Tax Act 2004 (Land Tax Act) as follows:

• The Act makes minor and consequential amendments to the Land Tax Act.
• The Act provides for an initial stage of updates to the landholder duty provisions under Chapter 3 of the Duties Act. The landholder duty changes align the ACT with other jurisdictions. The amendments are part of the first stage of clarifying and modernising the landholder duty provisions.

Key points of the Landholder Duty changes in ACT

• Section 86 was amended - the Act clarifies and simplifies how duty is imposed on a relevant acquisition by a landholder, being an entity with an interest in ACT land.
• Section 87 was amended - the Act allows for regulations to prescribe circumstances where the requirement for an acquisition statement is unnecessary. Section 87(4)(a) introduces a new requirement for a person to provide an email address when they make a relevant acquisition.
• New section 80(5) - affirms that an agreement for the sale of land under the meaning of landholding includes the grant of a crown lease.
• Section 89 was amended – to further support and maintain the integrity of the tax system and debt recovery arrangements. The application of the joint and several liability provision for landholder duty was amended to include the landholder and trustee for a private unit trust scheme to align with other jurisdictions. This section deems that a trustee of a private unit trust scheme is the landholder for the purpose of this provision.
• Section 81 was amended with a new definition of ‘linked body’ - the landholder duty constructive ownership provisions involving linked bodies was amended to align with other jurisdictions to strengthen the provisions.
• Section 17(9) amended to include a new definition of related person, and new section 77A - the definition of an “associated person” was amended to reduce the potential to use interposed entities to reduce tax against the intent of the provisions. The Act amends and consolidates the definition of associated persons to capture common minority shareholders. The changes align with how companies and persons are associated under the Duties Act 2000 (Vic). Private companies can be associated if ‘minority shareholders’ common to each company would together be a majority shareholder if those interests were aggregated and dee
• New sections 90 and 90A, and 90B was amended to reference specific relevant acquisition types:
  • Single Interest Calculation – New Section 90 
  • Aggregated Interest Calculation – New section 90A
  • Further Interest Calculation – Section 90B

Unencumbered value determination – Section 90C. This section addresses the administration of circumstances where a valuation report of landholdings does not provide a valuation in respect of each interest acquired within the relevant period (within three years of the relevant acquisition).

Other duties changes

• Consolidation of the definition of a ‘complying superannuation fund’ and removal of superseded references. Superseded definitions in section 63(2) were removed.
• Section 17 no double duty - Replaced superseded references to marketable securities.

The Explanatory Statement³ accompanying the Bill includes numerous examples and diagrams to better understand the technical amendments around landholder duty.

MORE INFORMATION

If you have any duties questions, please contact Mira Brewster, Sam Mohammad or contact your local adviser.

_{^{1Revenue Legislation Amendment Bill 2022}} 

_{^{2Revenue Legislation Amendment Act 2023}}

_{^{3Explanatory Statement}}