Recent duty changes
The Western Australian Treasurer has announced that the state will be joining the stamp duty reform push. In particular it is intended that:
· the rate of mortgage duty will be halved for all new mortgages or advances on existing mortgages which occur from 1 July 2006 and will be abolished completely from 1 July 2008
· stamp duty on hiring transactions will be abolished completely from 1 January 2007
· stamp duty on the sale of business property other than real property will be abolished from 1 July 2010. This will mean no duty on business property such as goodwill, intellectual property and statutory licenses.
Other duty changes scheduled for the second half of 2006 include:
· an increase in the Queensland conveyance top rate from 3.75% to 4.5%
· abolition of ACT duty on transfers of goodwill, intellectual property and statutory licences/permissions under Commonwealth or ACT law
· abolition of ACT duty on franchise agreements entered into on or after 1 July 2006 (except for those longer than 30 years)
· a 50% cut to Tasmanian mortgage duty
· abolition of Northern Territory stamp duty on the grant and renewal of leases and franchises
· abolition of Northern Territory stamp duty on unquoted marketable securities.
Land tax - Victoria
In previous issues of Indirect Tax Quarterly, we have covered the introduction of Victorian land tax changes for lands held in trust. These changes include the introduction of a land tax surcharge for trusts with aggregate property holdings above $20,000. As a transitional measure, trustees of existing discretionary trusts have a one-off opportunity to nominate a trust beneficiary. By nominating a beneficiary, the trustee will be assessed at the ordinary land tax rates on trust property acquired on or before 31 December 2005 (and the 2006 land tax assessment will be capped at 150% of the tax payable in 2005 on the same land holdings).
We offer three reminders:
· the deadline for nominating a beneficiary of a discretionary trust is 30 June 2006. However, a nomination will not necessarily result in the optimal land tax result in every circumstance. Before a nomination is made, the implications need to be fully identified and considered
· a trustee of an existing discretionary trust which acquires land after 31 December 2005 will be taxed on that land at the trust surcharge rates, regardless of whether a beneficiary is nominated under the transitional arrangements
· anyone planning to set up a discretionary trust or who has done so since 1 January 2006 should be aware that trust land holdings will be subject to the new rules - there is no process to nominate a beneficiary and the trustee will be taxed on trust lands at the trust surcharge rates.
For assistance with Victorian land tax issues, including advice on the implications of nominating or not nominating a beneficiary of a discretionary trust, contact Georgia Galiotos on +61 (0) 3 9208 7345.
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Page Last Updated: 09 May 2006
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Source: Deloitte Touche Tohmatsu - Australia (English)
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