2014 Amendments

State Revenue Legislation Amendment Act 2014

The State Revenue Legislation Amendment Act 2014 received assent on 20 May 2014.

The amendments commence on the date of assent unless otherwise indicated.

Duties Act 1997

Landholder duty

The amendment requires an acquisition statement for an acquisition that is subject to duty to be lodged with the Chief Commissioner within 3 months after it is made.

Aggregation of interests

The Duties Act 1997 provides for the aggregation of the interests of related persons and associated persons in certain circumstances, as a means of preventing duty avoidance practices.

The amendment ensures that a natural person, or a private company, and a trustee of a discretionary trust are not automatically treated as related persons if the natural person or private company is a beneficiary of the trust.

The amendment ensures that the trustee of a complying superannuation fund and another trustee of a complying superannuation fund are considered to be associated persons by reason of having a common beneficiary, only if a member of the first fund (either alone or together with other members of the first fund) has an interest in the other fund of more than 20%.

Other amendments

Other amendments in the Bill include:

  • updates to the definitions of matrimonial property and relationship property to reflect the power of the Family Court to order that property be treated as property of parties to a marriage or de facto relationship
  • makes minor amendments of a statute law revision nature.

Land Tax Management Act 1956

These amendments apply from 2014 tax year except Child care amendments apply from 2013.

Unit trusts

The amendments provide for an additional criteria that must be met before a unit trust is considered to be a fixed trust. The criteria are that the unit trust can only issue one class of units and each unit provides the holder with an entitlement to both the income and capital of the trust fund which is fixed and in the same proportion.

Charitable bodies

Institutions are exempt from land tax if they are carried on solely for charitable or educational purposes.

The amendment makes it clear that the exemption also applies to bodies corporate , societies, institutions or other bodies carried on solely for charitable or educational purposes.

Child Care Centres

From 1 January 2012, a new National Law commenced operation under the Children (Education and Care Services) National Law (NSW), and replaced the licensing processes for child care services with provision for approval of providers and services, and certification of supervisors of services.

This amendment updates the land tax exemption for child care centres for consistency with the National Law.

Rural land

Land that is rural land is exempt from land tax if the dominant use of the land is for a primary production purpose.

The amendment reflects changes in planning terminology brought about by the standard environmental planning instrument prescribed under the Environmental Planning and Assessment Act 1979.

Life estates

A person who holds a life interest in land is deemed to the owner of land for land tax purposes. Before this amendment, the person holding the remainder or reversionary interest was excluded from liability for land tax.

The amendments combat an avoidance practice by deeming the person with a remainder or reversionary interest and the owner of the life interest to be joint owners of the land. The Principal Place of Residence (PPR) exemption will no longer be available if the person with a remainder or reversionary interest is a company or a special trust. Special trusts will not be able to use the creation of a life estate to gain access to the tax free threshold.

The amendment does not affect life estates created by a will where the life estate is granted to a natural person whose life is also the subject of the life estate.

Acquiring a new Principal Place of Residence

A land owner can claim the PPR exemption for two properties for one tax year. If a new residence is purchased within the 6 months leading to the relevant taxing year with the intention that this new residence will be occupied as a PPR and the former residence has not been sold at the relevant taxing year both residences are exempt.

Previously the owner had to sell the former residence by 30 June following the relevant taxing year and occupy the new residence by the following 31 December for the concession to apply.

The amendment removes the requirement that the former residence must be sold. The only requirement is that the new residence must be used and occupied as the PPR by the following taxing date. The concession applies for only one tax year.

Temporary absence from Principal Place of Residence

An owner may be absent from their PPR for up to 6 years but still retain the PPR exemption, provided the property is not leased for more than 6 months during the tax year.

Owners may retain the exemption if they are absent from their home for an extended period of time.

At present the concession only applies if the person uses and occupies other land that is not owned by the person as a PPR during their absence.

The amendment removes the requirement that an absent owner live in another property as their PPR on the taxing date to qualify for the exemption. It will be sufficient that the person does not own any other land used and occupied by the person as the PPR.

Taxation Administration Act 1996

Amendments to the Taxation Administration Act 1996 clarifies that a director or former director of a corporation who is required by the Chief Commissioner to rectify a failure by the corporation to pay tax must rectify that failure within a period specified by the Chief Commissioner in a notice in writing served on the director or former director.

The amendments ensure that, if the failure of to pay the tax is not rectified, the liability of a director or former director for a corporate tax liability is not limited to the original assessment amount, but can include interest and penalty tax payable in respect of that assessment amount.

The amendments require the Chief Commissioner to issue to the director or former director a notice of assessment of the tax liability of the director or former director, in relation to corporate tax liability.

Last updated: 24 May 2016