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Legislative Assembly for the ACT: 1998 Week 11 Hansard (10 December) . . Page.. 3429 ..

MS CARNELL (continuing):

It has come to the attention of the Commissioner of ACT Revenue that our current provisions are now being circumvented by the use of non-ACT companies and unit trusts to hold the land. In the case of unit trusts, units are no longer being transferred but are redeemed and later reissued to circumvent duty being paid on their transfer. To overcome these problems the Duties Bill, in line with New South Wales, has extended the landholding provisions to private companies incorporated and unit trusts established outside the ACT that own ACT land. The dutiable acquisition of an interest in a landholding company or unit trust has also been extended to include the issue and redemption of shares and units and the variation of rights attached to shares and units.

Such provisions will operate when a person or group of associated persons acquire more than a 50 per cent interest in a private company or trust which owns ACT land. The move to a majority interest test should limit the operation of the provisions to persons who can control the private company and trust and thereby effectively own the land.

Chapter 3 of the Duties Bill also contains a number of other provisions adopted by New South Wales to overcome duty avoidance practices, particularly in relation to marketable securities. The lease duty base has been expanded to include licences to occupy land and franchise agreements, in line with New South Wales. Franchises, a growing form of business, are currently liable for duty under the sale of business provisions. The Duties Bill continues to impose duty at conveyance rates on long-term subleases for periods exceeding 30 years. It maintains the lessor as the person liable to pay the duty imposed on leases and licences to occupy land.

The chapters dealing with return-based duties in respect of sales and purchases of shares through sharebrokers, the hiring of goods and the issuing of insurance policies closely follow the New South Wales Act. In respect of motor vehicles, liability for duty on the sale of used motor vehicles will change from the licensed motor dealer to the purchaser. However, dealers who wish to continue to collect and pay duty by return on the purchaser's behalf will be able to do so under return provisions contained in the new Taxation Administration Bill, which will also be tabled today.

Mr Speaker, as mentioned earlier, the concept of a new, contemporary and uniform duties Bill arose from a working party of State and Territory revenue officers which included New South Wales, ACT, Victoria, South Australia and Tasmania. During its life, this project received the support of both Labor and Liberal ACT governments.

The ACT Duties Bill closely follows the New South Wales Duties Act, which, when introduced in 1997, had received full support from key national businesses and professional groups. The consultation process in respect of the ACT's Duties Bill has been very comprehensive. The ACT Revenue Office has been maintaining a continuous dialogue with professional legal and accounting groups. This will continue to ensure the appropriate amendments to the Duties Bill reflect community input and the smooth transition from the current Act to the new legislation in due course.

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