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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2015-06-18 Daily Xml
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Statutes Amendment and Repeal (Budget 2015) Bill

Standing Orders Suspension

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (15:35): Mr Speaker, I move:

That standing orders be so far suspended as to enable me to introduce a bill forthwith.

The SPEAKER: There being an absolute majority present, I will accept the motion.

Motion carried.

Introduction and First Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (15:36): Obtained leave and introduced a bill for an act to amend various acts, and to repeal the Hindmarsh Island Bridge Act 1999, for the purposes of the 2015 state budget. Read a first time.

Second Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (15:36): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

This Bill contains measures that form part of the Government's budget initiatives for 2015-16 and implements the outcomes of the State Tax Review.

The changes that the Government is making in this bill will remove significant cost barriers to business investment and expansion, encourage the creation of new businesses in the State, and provide lasting improvement to the South Australian economy.

These changes will reduce the harmful impact inefficient taxes have on the economy and are consistent with the views expressed by South Australians during the State Tax Review.

For contracts entered into on or after today, stamp duty will be abolished in relation to non-real property transfers and non-quoted marketable securities.

In addition by 1 July 2018 stamp duty will be abolished on non-residential real property transfers.

Transfers of statutory leases and licences, such as fishing licences, taxi licences, gaming machine licences and entitlements, together with most forms of business assets including goodwill, trading stock (other than land), and intellectual property will obtain the benefit from the abolition of stamp duty on non-real property transfers.

Transfers of water licences are already stamp duty exempt.

From 18 June 2015, only property transfers involving land will remain liable for conveyance duty.

A limited number of leases and licences that have a very close connection with land will remain dutiable—namely, mining and petroleum leases and licences and forestry property (vegetation) agreements.

Exploration tenements will remain dutiable but will continue to obtain the benefit of existing concessional duty rates. The range of exploration tenements eligible for the concessional stamp duty rates has also been expanded to include retention tenements.

In addition to the removal of stamp duty on transfers of gaming machine entitlements, the stamp duty surcharge on the transfer of a gaming machine business, will also be abolished.

There will be a phased abolition of conveyance duty on non-residential real property transfers between 1 July 2016 and 1 July 2018. Duty rates will be reduced by a third from 1 July 2016, a further third from 1 July 2017, before the duty is abolished from 1 July 2018. It is estimated that there will be between 5,500 and 6,000 non-residential real property transfers each year that will benefit from this abolition of duty.

Stamp duty will continue to apply to non-exempt transfers of primary production land.

There are detailed provisions which set out what will be considered to be residential land. The Commissioner of State Taxation will rely on information provided by the Valuer-General in relation to the use of the land and in some cases the zoning of the land. Taxpayers will be able to readily ascertain the classification of the land that they are purchasing.

As the rates of stamp duty on non-residential land are phasing out over three years, a robust anti-avoidance provision has been included in the Bill to provide significant deterrence to persons who may attempt to artificially structure transactions is order to take advantage of a lower rate of duty in the future.

There are also a number of complementary amendments contained in the Bill that will also reduce the stamp duty burden on South Australian businesses.

Firstly, stamp duty is currently payable on the transfer of property from one corporation to another regardless of whether the corporations are part of the same corporate group.

Effective from 18 June 2015, this Bill will amend the Stamp Duties Act 1923 to provide a corporate reconstruction exemption that is considerably broader than the ex gratia relief currently available which delivers on and significantly expands on the 2013 budget commitment to provide a 100 per cent exemption based on the existing criteria.

The exemption available will effectively abolish stamp duty on genuine corporate reconstructions.

Secondly, the issue, redemption or transfer, of units in a non-listed unit trust is currently subject to stamp duty at conveyance rates based on the consideration or the market value, whichever is greater.

From 1 July 2018, to coincide with the abolition of stamp duty on non-residential real property, stamp duty is therefore also being abolished on the issue, redemption and transfer of units in unit trusts under section 71 of the Stamp Duties Act.

Thirdly, from 18 June 2015, transfers of retention tenements will receive the same concessional stamp duty arrangements that apply to transfers of exploration tenements.

The concessional stamp duty arrangements mean that eligible transfers are only required to pay stamp duty of up to $1,000 rather than the duty rates that would normally apply.

Changes in the focus of the State's petroleum and mineral related activity since the concession came into force in 1980 have seen the greater application of retention tenements, with the major utilisation of such tenements only very recently materialising in practice. The retention tenement is another form of exploration tenement offering extended tenure to carry out further pre-production exploratory works and to allow adequate time to assess the discovery, and to bring the discovery onto commercial production. The expanded stamp duty concession will promote discovery activity and commercial production in South Australia.

Fourthly, the Stamp Duties Act will be amended to confirm RevenueSA's long standing assessing practice in relation to the stamp duty exemption for interfamilial farm transfers, in particular in relation to transfers to and from certain types of trusts.

This will allow farming businesses to be transferred between families as originally intended when the legislation was introduced and will replace an ex gratia scheme currently put in place by the Government.

Fifthly, the Taxation Administration Act 1996 will be amended so that it only requires 50 per cent of the tax in dispute to be paid before an appeal can be lodged with the Supreme Court. Currently 100 per cent of the tax in dispute is required to be paid before an appeal can be lodged. This measure is consistent with the Government's policy of increasing access to the justice system and dispute process by making the process affordable. The 50 per cent amount will prevent the lodgement of frivolous appeals but at the same time provide some relief to taxpayers.

The Bill also contains several other measures that will provide relief to taxpayers.

The Save the River Murray Levy will be abolished from 1 July 2015. This will save most households over $40 each year and most businesses over $182 each year. Importantly, while the Save the River Murray Fund will be wound up, the specific measures funded by the Save the River Murray Levy will continue to be delivered.

The Save the River Murray Fund will be wound up from 1 July 2016, after the monies in the fund have been fully spent. The balance in the Save the River Murray Fund is expected to be around $4.4 million at 1 July 2015, with funds expected to be fully spent in 2015.

The Hindmarsh Island Bridge Levy will be abolished from 1 July 2015.

The levy is currently paid by property owners when new allotments are created on Hindmarsh Island. The levy represents the property owner's contribution to the construction cost of the Hindmarsh Island Bridge. The levy is being abolished as it has high collection costs relative to the revenue raised and will remove a disincentive for subdivision and development on Hindmarsh Island.

From 18 June 2015, properties transferred into Special Disability Trusts for no consideration and used as the principal place of residence for the beneficiary will be exempt from conveyance duty. These properties will also be exempt from land tax from 1 July 2015.

Under current arrangements, conveyance duty is payable when a principal place of residence is transferred into a Special Disability Trust. The property is also liable for land tax if its site value is more than $323,000.

In addition, the existing exemption from stamp duty in respect of gifts of property used wholly for charitable or religious purposes will be extended to provide an exemption to charitable and religious bodies that purchase property that is to be used wholly for the organisations' charitable or religious purposes provided that the property is not wholly or predominantly used for business or commercial purposes.

Stamp duty ex gratia relief is provided on a regular basis to charitable and religious bodies that purchase property to be used solely for their charitable or religious purposes and the amendment to the Stamp Duties Act will enshrine that practice in legislation. It is not intended that the exemption extend to land used for business or commercial purposes by charities regardless of whether the funds generated from this activity is redirected to charitable purposes or not.

The Bill also enshrines in legislation two other stamp duty ex gratia schemes.

Firstly, the Bill provides for an exemption from stamp duty on motor vehicle transfers where the parent or legal guardian of an incapacitated person who is a minor purchases a vehicle to transport the minor. Consequential amendments will also be made to the Motor Vehicles Act 1959 to provide a 50 per cent concession to the registration fee component of one motor vehicle where the vehicle is used mainly for transporting an incapacitated minor, subject to certain conditions.

Secondly, the Bill provides an exemption from stamp duty on motor vehicle transfers where disability service providers purchase vehicles to transport persons with disabilities.

The Bill also makes a minor amendment to the Stamp Duties Act to ensure that domestic partners are recognised in all relevant places in the Act. In 2007 the Stamp Duties Act was amended to recognise domestic partners however due to an oversight the definition of 'Family Group' in one part of the Stamp Duties Act refers to relationships of 'consanguinity and affinity'. This means that domestic partners are not covered by this definition. The Bill corrects this anomaly.

The Bill also makes beneficial amendments to the waiver and refund provisions of the Land Tax Act 1936.

As part of the 2001-2002 State Budget, land tax relief was provided where taxpayers move home or construct a new home and where a land tax liability arises on an intended principal place of residence.

As a result of an anomaly in the operation of the provisions, the waiver/refund is not currently available where a person moves into a new property prior to 30 June but has not sold their old property, which was their previous principal place of residence.

The Bill amends the provisions to remove this anomaly.

In addition the Land Tax Act currently requires that a taxpayer lodge a waiver/refund request with RevenueSA by 30 September following the end of the financial year in respect of which the waiver/refund is sought. The Commissioner has no discretion to allow the late lodgement of a waiver/refund request under section 5A of the Land Tax Act once the deadline has passed.

The deadline can be onerous given some taxpayers are unaware of their entitlement to a waiver/refund. The Bill therefore contains an amendment to extend that deadline to five years from the issue of the assessment to which the application relates.

Whilst the overwhelming majority of provisions in the Bill are beneficial to business and taxpayers in general, the opportunity is also being taken to address some administrative and avoidance issues that have been identified by RevenueSA.

Section 60A of the Stamp Duties Act prescribes how the value of property conveyed or transferred is to be determined for the purposes of calculating the amount of stamp duty payable.

Sections 60A(1)(a) and 60A(2) of the Stamp Duties Act provide that in the case of a conveyance on sale (a transfer of property for consideration), the value of property is the greater of the consideration for the sale or the market value of the property as at the 'date of the sale'.

Section 60A(1)(b) of the Stamp Duties Act provides that in any other case, the value of property is the market value of property as at the 'date of the conveyance'.

The Commissioner of State Taxation (the 'Commissioner') has always interpreted 'date of the sale' to mean the date property is conveyed or transferred, with legal advices supporting this interpretation for over 20 years.

Therefore, in all situations, whether in the case of a conveyance on sale or in any other case, the 'date of the conveyance' has been the only date used by the Commissioner when determining the market value of property.

Legal advice departed from the long-standing interpretation of 'date of the sale' and advised that the relevant date is the date a binding contract/agreement to sell comes into existence.

Adoption of this interpretation of 'date of the sale' may result in tax avoidance, particularly by means of back-dated contracts/agreements or contrived long-term settlements between non-arm's length parties, which could result in erosion of the stamp duty revenue base.

In response to the recent adverse advice, and to confirm the Commissioner's long-standing position that the 'date of the conveyance' is the only relevant date when determining the market value of property, the Bill contains retrospective amendments to the Act that replace all references to 'date of the sale' with 'date of the conveyance'. Therefore, the Bill suitably amends section 60A of the Stamp Duties Act and other sections of the Stamp Duties Act including sections 31, 31A, 65 and 71DB to deal with this issue.

The retrospective amendments to the Stamp Duties Act contained in the Bill are essentially technical amendments that will have no impact on the overwhelming majority of taxpayers, for whom it will be 'business as usual'. However, the amendments are required to prevent the tax avoidance described above and the resulting erosion of the stamp duty revenue base.

The Bill also removes the exemption available in relation to the partition of property between members of a family group.

Section 71B of the Stamp Duties Act provides an exemption from stamp duty for family members where property is divided or partitioned and the owners prior to the division/partition take a portion of the property equal to the interest they previously held in the whole.

The exemption is an archaic one that has led to a considerable amount of tax avoidance. As there is no policy basis on which family members should receive such beneficial stamp duty treatment, this exemption is being removed.

The Government will also reduce the $1 million landholder threshold to zero from 1 July 2018.

The landholder model ensures that if control of an entity changes and that entity holds South Australian land assets above the threshold, conveyance rates of duty apply to the South Australian land assets being transferred.

This change coincides with the abolition of stamp duty on non-residential real property transfers and the removal of stamp duty on unit trusts and will therefore only apply where an entity holds residential and primary production land assets.

This will allow the landholder provisions to be more closely aligned with the general conveyance provisions where the transfer of any residential land no matter what the value will be charged with conveyance duty. From 1 July 2018 the landholder provisions will operate as pure anti-avoidance provisions to prevent residential and primary production land being transferred free of duty.

The Bill also contains amendments to the Land Tax Act to ensure that the minor interest provisions and the trust provisions work as intended.

Prior to 30 June 2008, it was a common land tax minimisation practice to create minor interests in properties to avoid the aggregation principle under the Land Tax Act.

Effective from 30 June 2008, section 13A of the Land Tax Act was introduced, allowing the Commissioner to disregard minor interests in properties in certain circumstances.

Whilst section 13A has generally been effective in dealing with tax minimisation practices, a deficiency has been identified in the provisions as a result of an adverse objection. This deficiency relates to the trust and aggregation provisions in section 13, the minor interest provisions in section 13A and the interaction of the two.

The inadequacy in section 13A of the Land Tax Act is that it does not apply where the 100 per cent legal owner of property holds this interest partly in direct ownership and partly in a trust ownership. This is the case regardless of whether the minor interest is held directly or on trust.

For example a 100 per cent legal owner could declare a 1 per cent minor interest in a property to be held on trust for a beneficiary or a range of beneficiaries.

In this scenario, section 13 of the Land Tax Act operates to acknowledge the trust ownership so that the relevant property is not aggregated with other property held by the same legal owner. Section 13A of the Land Tax Act however cannot currently apply to disregard the 1 per cent trust ownership as the legal owner retains a 100 per cent legal interest in the property, and there is therefore no minor interest recognised by the Land Tax Act for section 13A to disregard. Consequently, the aggregation principle is avoided where it should not be.

The amendments remedy the identified deficiency by allowing the Commissioner to distinguish a trust ownership from a direct ownership and to apply the minor interest provisions even where the legal ownership is all in the same name, but a part of the land is held on trust.

The Bill also restores the intended legislative position in relation to the minor interest provisions that was arguably put in doubt by the judgment in the case of Kalomel Nominees Pty Ltd & Anor v Commissioner of State Taxation [2012] SASC 10 (Kalomel). The amendments ensure that a decision by the Commissioner to disregard a minor interest should operate from the day that the interest was created even if the decision to disregard the interest was not made until the following financial year. This interpretation would render the provisions very difficult to practically apply in many situations.

Whilst a subsequent decision of the Supreme Court in the matter of Kyren Nominees Pty Ltd v Commissioner of State Taxation [2013] SASC 58 has overturned this interpretation of the Kalomel decision, these amendments operate to put the matter beyond any doubt.

The Land Tax Act is also being amended to ensure interest and penalty tax can be imposed on an assessment or reassessment of land tax in a situation where a taxpayer provided false or misleading information to RevenueSA in order to obtain an exemption.

This amendment arises out of a land tax objection where a taxpayer had been receiving an exemption due to providing RevenueSA with false or misleading information, and because an exemption had been in place, the relevant taxpayer had not been issued with any assessments.

Once the Commissioner determined that the exemption had been wrongly granted due to the false or misleading information, assessments were issued for financial years in which the exemption was incorrectly granted. However, because no assessments were originally issued, due to a technicality in the wording of the Act, there had been no default by the taxpayer to trigger the imposition of interest and penalty tax. This is clearly a situation where interest and penalty tax should apply to discourage taxpayers from providing the Commissioner with false and misleading information.

The Bill therefore amends the Land Tax Act to ensure that penalty tax can be charged in these situations where appropriate.

The Bill amends the Supreme Court Act 1935 to allow for a tiered fee structure for court fees in respect to probate matters. The new fee structure will be based on the value of the estate and will commence from 1 January 2016.

The current fee of $1,088 will be reduced for estates valued less than $200,000. The highest fee will be $3,000 for estates valued at over $1 million.

This Bill amends the Rates and Land Tax Remission Act 1986 to provide a new cost of living concession. A new cost of living concession of up to $200 per annum per household will be paid to eligible households from 1 July 2015.

The cost of living concession will replace the existing council rate concession of up to $190 per annum provided to pensioners, low-income earners and specified self-funded retirees who are home owners.

Eligibility for the new concession will be expanded to include pensioners, low-income earners and specified self-funded retirees who are tenants. Expanding the criteria means an extra 45,000 households that are tenants will benefit from the new concession.

Eligible pensioners and low-income earners who own their own homes will receive $200 per annum to put towards their greatest needs. Eligible pensioners and low-income earners who are tenants and eligible self-funded retirees who hold a Commonwealth Seniors Health Card will receive $100 per annum per household.

The Bill makes royalty payable on the minerals recovered by councils in South Australia from their borrow pits at a royalty rate of 55 cents per tonne from 1 July 2015.

This replaces the royalty exemption provided to councils and ensures that the state receives a royalty benefit from those minerals that are owned by the Crown (in right of the State of South Australia) for the benefit of all South Australians.

Council borrow pits will continue to be regulated and controlled, apart from the royalty payable, under the provisions of the Local Government Act 1999.

I commend this Bill to the House.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

This clause sets out the scheme for the commencement of the various amendments and the repeal that are to be effected by this measure.

3—Amendment provisions

This clause is formal.

Part 2—Amendment of Gaming Machines Act 1992

4—Repeal of section 28A

5—Repeal of section 38A

These amendments are consequential

Part 3—Amendment of Land Tax Act 1936

6—Amendment of section 5—Exemption or partial exemption of certain land from land tax

Under section 5 as amended by this clause, an exemption of land from land tax will be available where the land is owned by the trustee of a special disability trust and the Commissioner is satisfied that the land constitutes, or is intended to constitute, the principal place of residence of the principal beneficiary of the special disability trust.

An associated waiver or refund scheme is also included.

A number of definitions are also inserted for the purposes of the exemption. Special disability trust is defined by reference to the Social Security Act 1991 and the Veterans' Entitlements Act 1986 of the Commonwealth.

7—Amendment of section 5A—Waiver or refund of land tax for residential land in certain cases

Section 5A authorises the Commissioner of State Taxation to grant a waiver or refund of land tax paid or payable by an applicant if certain criteria are satisfied. The amendment made by this clause expands the circumstances in which this can occur so that the Commissioner can grant a waiver or refund in relation to land tax where the relevant land ceased to be the applicant's principal place of residence during the course of the previous financial. The waiver or refund may be granted if proper grounds for exempting the land from land tax under section 5 existed immediately before the land ceased to be the applicant's principal place of residence and the applicant divested himself or herself of the land before the end of the financial year in relation to which the tax is payable.

This clause also amends subsection (4) of section 5A.That subsection currently requires that an application for a waiver or refund of land tax be made on or before 30 September following the end of the financial year in respect of which the waiver or refund is sought. Under the subsection as amended, the requirement will be for an application for a refund to be made not more than 5 years after the assessment of the liability to the tax.

8—Amendment of section 13A—Commissioner may determine that minor interest is to be disregarded

The amendments relate to the section of the Act that deals with minor interests in land. This section is intended to address situations where taxpayers use minor interests and trust structures to avoid the rules about the aggregation of land for the purposes of the imposition of land tax. Amendments to the section are intended to address aspects of the decision in Kalomel Nominees Pty Ltd and Another v Commissioner of State Taxation in 2012 to ensure that a decision of the Commissioner that an interest was created for the purpose of reducing the amount of land tax can have effect with respect to an interest from the date on which the interest was created. Other amendments will allow the Commissioner, in considering whether interests have been created for the purpose of reducing land tax, to consider the relationship between any trustee and beneficiary (subject to some specified exceptions).

9—Amendment of section 19—Time for payment of tax

This amendment addresses somewhat of a 'technical' issue associated with the interaction between the Land Tax Act 1936 and the Taxation Administration Act 1996. Essentially, the issue is that under the Taxation Administration Act 1996, a taxpayer is only liable to penalty tax where there has been a tax default within the meaning of that Act. It is arguable that a person who has not been issued with an assessment has not failed to pay tax in certain respects, even though a tax liability might have actually existed prior to the issuing of the assessment. The amendment will have the effect of creating a tax default for the purposes of the Taxation Administration Act 1996 in certain cases where the failure to serve an assessment was attributable (wholly or in part) to false, misleading or incomplete information provided to the Commissioner, or to a failure to provide information that should have been provided to the Commissioner.

10—Transitional provision

The first transitional provision makes it clear that the amendment to section 5A(4) applies in relation to an application for a land tax refund where the liability to the tax was assessed for the 2014/2015 financial year or a subsequent financial year. The second transitional provision makes it clear that the amendments to section 13A extend to any interest after the commencement of this Part, including an interest created before the Schedule (so that the amendments will apply in respect of any financial year commencing after the commencement of this Part).

Part 4—Amendment of Local Government Act 1999

11—Amendment of section 294—Power to enter and occupy land in connection with an activity

These amendments will have the effect of requiring a council that recovers extractive minerals under section 294 of the Act to pay royalty at the rate set out in section 17(4)(a) of the Mining Act 1971. In connection with this requirement, some of the sections of the Mining Act 1971 are to be applied to a council that recovers extractive minerals as if the council were carrying out operations under that Act and as if the council held a mining tenement for the recovery of extractive minerals. The enactment of these amendments will require the operation of section 7(2) of the Mining Act 1971 to be 'displaced' to some extent. Royalty collected under this scheme will not be payable into the Extractive Areas Rehabilitation Fund under the Mining Act 1971.

Part 5—Amendment of Motor Vehicles Act 1959

12—Amendment of section 38B—Registration fees for certain incapacitated persons or carers

This amendment will extend the scheme for a reduction in the prescribed registration fee for motor vehicles owned by certain incapacitated persons to motor vehicles owned by the parents or legal guardians of certain incapacitated children (subject to complying with the criteria prescribed by the section).

Part 6—Amendment of Rates and Land Tax Remission Act 1986

13—Amendment of long title

This clause amends the long title of the Bill to incorporate reference to the proposed payment of an amount to certain persons as a concession to assist with cost of living pressures.

14—Amendment of section 1—Short title

This clause amends the short title of the Bill to incorporate reference to the proposed cost of living concession scheme.

15—Substitution of section 3

This clause substitutes current section 3 as follows:

2—Interpretation

The proposed section retains the definitions contained in existing section 3, and inserts the following new definitions:

approved aged persons housing scheme;

residential premises;

residential tenancy agreement;

when a person will be taken to occupy residential premises as an owner or a tenant.

3—Entitlement to payment of concession

The proposed section provides that an eligible person for a financial year who satisfies the eligibility requirements prescribed by the regulations is entitled to payment by the Minister of an amount determined in accordance with the regulations in respect of that financial year. Eligible person is defined as a person who, on 1 July of the relevant financial year, occupied residential premises as an owner or tenant of the premises and was of a class prescribed by the regulations for the purposes of the proposed subsection.

16—Amendment of section 4—Remission of rates

This amendment is consequential on the insertion of proposed section 9.

17—Amendment of section 7—No interest etc payable

This clause inserts a new subsection 7(2) to provide that no interest is payable by the Minister in respect of an amount to which a person is entitled under the Act.

18—Amendment of section 8—Offences etc

This clause makes a number of consequential amendments to include references to the payment in proposed section 3 in existing offence provisions, and to make penalty provisions in the section consistent.

19—Insertion of section 9

This clause inserts a new section as follows:

9—Regulations

The proposed section allows the Governor to make regulations.

Part 7—Amendment of Stamp Duties Act 1923 that is taken to have effect on 1 July 2011

20—Amendment of section 91—Interpretation

This clause amends the definition of private unit trust scheme in section 91 of the Act to exclude any unit trust scheme that is an approved deposit fund or a pooled superannuation trust.

Part 8—Amendment of Stamp Duties Act 1923 that is taken to have effect on 18 June 2015 (Corporate reconstructions)

21—Amendment of section 102—Value of notional interest acquired as a result of dutiable transaction

This clause amends section 102 by removing subsection (2), which is redundant.

22—Amendment of section 102B—Acquisition statement

This clause makes a consequential amendment to section 102B relating to the requirement of a person or group to lodge a return after a dutiable transaction occurs.

23—Amendment of section 102G—Multiple incidences of duty

Subsections (3) and (4) of section 102G are deleted by this clause.

24—Insertion of Part 4AA

This clause inserts a new Part.

Part 4AA—Corporate group exemptions

102H—Interpretation

This section provides definitions for a number of terms that are used in Part 4AA.

102I—Direct and indirect interests

This section explains the meaning of the terms direct interest and indirect interest. The section also provides that 2 corporations are related corporations if 1 of the corporations has a direct interest in the other or a series of such relationships can be traced between them through other related corporations.

102J—Parent corporations and corporate groups

This section defines what is meant by corporate group. A corporate group consists of a parent corporation and its subsidiaries. If a corporation has a direct or indirect proportionate interest in another corporation that is a 90% or more, or a direct and indirect interest in another corporation that, in combination, constitutes a proportionate interest of 90% or more, the first corporation is the parent corporation of the second, and the second is a subsidiary of the first.

102K—Transactions to which this Part applies

Section 102K provides that Part 4AA applies to the following transactions:

a transaction involving a conveyance of property, or an agreement to convey property, from a member of a corporate group to another member, or to other members, of the corporate group;

a transaction whereby, under Part 4, a member of an eligible corporate group notionally acquires an interest in the underlying local land assets of a land holding entity.

However, Part 4AA applies to the transaction only if certain other specified criteria related to the transaction are satisfied. For example, the Part will apply to the transaction only if the corporate group's interest in the property that is the subject of the transaction is not diminished as a result of the transaction.

102L—Exemption from duty

This section requires the Commissioner of State Taxation to exempt a transaction from duty if he or she is satisfied that Part 4AA applies to the transaction. If a transaction is exempted from duty, the Commissioner is to assess the transaction, and any relevant instruments, as exempt from duty.

102M—Application for exemption

This section sets out requirements in relation to exemption applications. An application for an exemption under section 102L may be made at any time before, or within 1 year after, the completion of the transaction to which the application relates.

102N—Conditions of exemption

An exemption under section 102L will be subject to conditions specified in this section.

102O—Revocation of exemption

This section authorises the Commissioner to revoke an exemption granted under section 102L if he or she ceases to be satisfied that Part 4AA applies to the transaction or if certain other events, specified in the section, occur.

102P—Duty payable if transaction ceases to be exempt

If an exemption under section 102L is revoked, duty is payable in relation to the relevant transaction.

Part 9—Amendment of Stamp Duties Act 1923 that is taken to have effect on 18 June 2015 (General tax reforms)

25—Amendment of section 2—Interpretation

This clause will ensure that various interests, rights and other items that are associated with land will be taken to be within the concept of land for the purposes of this Act.

26—Amendment of section 14—Instruments to be separately charged

This clause amends section 14 to deal with the situation where an instrument relates to types of property that are chargeable with different rates of duty or to a type of property chargeable with duty and a type of property not chargeable with duty. An instrument of this kind is to be treated as if the provisions of the instrument relating to each of the different types of property were a separate instrument and related only to that type of property.

Section 14 as amended by this clause will also provide that a person liable to pay duty on an instrument of this kind is to provide the Commissioner with evidence of the value of each of the different types of property conveyed or transferred by the instrument.

27—Amendment of section 31—Certain contracts to be chargeable as conveyances on sale

Section 31 provides that a contract or agreement in writing for the sale of an estate or interest in property is to be charged with ad valorem duty as if it were a conveyance on sale of the estate or interest. The first amendment made by this clause adds to a list of exceptions included within the provision, so that there is an exception for stock, implements and other chattels if the relevant contract or agreement provides for the sale as a going concern of land used wholly or mainly for the business of primary production together with the stock, implements and chattels, and the stock, implements and chattels are held or used in connection with the business.

The second amendment provides clarification in relation to the calculation of duty payable on a written contract or agreement that is dutiable under section 31. The value of the estate or interest contracted or agreed to be sold is to be determined for the purposes of the section by reference to the consideration specified as being payable for the estate or interest. Where duty has been paid on a contract or agreement as required under the section, duty is payable on a conveyance made to the purchaser under the contract or agreement only if the value of the estate or interest on the date of the conveyance is greater than the consideration specified in the contract or agreement.

If it appears to the Commissioner that the consideration specified as being payable for the estate or interest may be less than the value of the estate of interest, and no evidence of the value of the estate or interest, or only unsatisfactory evidence, is furnished to the Commissioner, the Commissioner may arrange for a valuation to be made of the estate or interest and may assess the duty payable by reference to the valuation.

28—Repeal of section 31A

Section 31A is repealed by this clause.

29—Amendment of section 60A—Value of property conveyed or transferred

This clause sets out an additional principle that is to apply when determining the value of property.

30—Substitution of section 62

This clause recasts section 62 of the Act. This section applies to—

a transaction under which a person acquires a share in a company or an interest under a trust that confers a right to the possession of a dwelling owned and administered by the company or the trustees of the trust; or

a transaction under which a person acquires a right to the possession of land as a result of becoming or being the owner of a share in a company or an interest under a trust.

However, subsection (2) makes it clear that the section does not apply to—

a transaction under which a person acquires a share in a company or an interest under a trust that confers a right to the possession of a dwelling that is part of a retirement village scheme under the Retirement Villages Act 1987; or

a transaction exempted from the section by the regulations.

An instrument that gives effect to, or acknowledges, evidences or records, a transaction to which section 62 applies is dutiable under the Act.

31—Amendment of section 67—Computation of duty where instruments are interrelated

One amendment made by this clause is consequential.

The other amendment will ensure that if 2 or more instruments form or arise from substantially 1 series of transactions, then the instruments will be taken to form or arise from a single transaction made when the earlier or earliest of the transactions was made.

32—Repeal of section 71B

This clause removes an exemption that relates to a partition or division of property between members of a family group.

33—Insertion of section 71CAA

New section 71CAA will provide an exemption from duty in connection with certain instruments related to special disability trusts.

34—Amendment of section 71D—Concessional duty to encourage exploration activity

These amendments extend the scheme established by section 71D to retention leases or licenses associated with exploratory or investigatory operations.

35—Amendment of section 71E—Transactions otherwise than by dutiable instrument

These are consequential amendments.

36—Amendment of section 91—Interpretation

These are consequential amendments.

37—Amendment of section 92—Land assets

These are consequential amendments.

38—Insertion of Part 4A Divisions 3, 4 and 5

This clause provides for the abolition of certain duties and a surcharge on 18 June 2015, but only in relation to relevant conveyances, transfers, transactions or instruments executed or initiated after that date and to still require the payment of duty or a surcharge in relation to conveyances, transfers, transactions or instrument that relate to contracts or transactions entered into before that date.

39—Insertion of section 109

It is necessary to provide a specific anti-avoidance provision in connection with proposed new section 71DC and 105A.

40—Transitional provision

It is appropriate that certain amendments apply in relation to contracts, agreements and instruments entered into or executed before 18 June 2015.

Part 10—Amendment of Stamp Duties Act 1923 that takes effect on assent

41—Amendment of section 60—Interpretation

This clause makes it clear that certain instruments that are expressly exempt from the operation of section 71 will also not be considered to constitute a conveyance or sale under Part 3 Division 6.

42—Amendment of section 60A—Value of property conveyed or transferred

The amendment made by this clause to section 60A clarifies that where reference is made in the Act to 'the value of property conveyed or transferred', the reference is to the market value of the property as at the date of conveyance.

43—Amendment of section 65—Where consideration consists of real or personal property

This clause substitutes a reference to the date of the sale of property in section 65 with a reference to the date of the conveyance of the property.

44—Amendment of section 71—Instruments chargeable as conveyances

The first amendment 'expands' the exemption under subsection (5) of section 71 so as to include any transfer of property to a body established wholly for charitable purposes, as long as the Commissioner is satisfied that the property will not be used (wholly or predominantly) for commercial or business purposes (and the amendment will also make it clear that the paragraph will not apply in any circumstances involving property to be used for commercial or business purposes, even if any revenue, income or other benefit arising from such use is to be applied towards the charitable or religious purposes of the body).

The second amendment will allow domestic partners to be recognised for the purposes of the definition of family group in section 71.

45—Amendment of section 71CC—Interfamilial transfer of farming property

These amendments extend the scheme established by section 71CC of the Act to certain trusts including discretionary trusts, unit trust schemes and self managed superannuation funds.

46—Amendment of section 71DB—Concessional duty on purchases of off-the-plan apartments

This clause substitutes a reference to the date of the sale of property in section 71DB with a reference to the date of the conveyance of the property.

47—Amendment of section 71EA—Interpretation

This amendment will allow domestic partners to be recognised for the purposes of the definition of family group in Part 3 Division 7 of the Act (insofar as this is relevant to the application of these provisions after the enactment of this measure).

48—Amendment of Schedule 2

This clause sets out certain exemptions in respect of stamp duty on the registration of certain motor vehicles.

49—Transitional provisions

The amendments made to sections 60A and 65 are to have retrospective effect, but not so as to impose duty in respect of an instrument or transaction if, before 17 December 2013, an assessment of duty was made on the instrument or transaction and an objection to the assessment was lodged with the Minister no later then 60 days after the date of service of the assessment.

Part 11—Amendment of Stamp Duties Act 1923 that takes effect on 1 July 2016

50—Insertion of section 71DC

Concessional duty is to apply in relation to land transfers, other than with respect to land taken to be used for residential purposes or primary production, from 1 July 2016.

Part 12—Amendment of Stamp Duties Act 1923 that takes effect on 1 July 2018

51—Amendment of section 71—Instruments chargeable as conveyances

These are consequential amendments.

52—Amendment of section 98—Land holding entity

From 1 July 2018, the $1,000,000 threshold under Part 4 is to be removed.

53—Insertion of Part 4A Division 5

Duty on certain land transfers is to be removed from 1 July 2018 (subject to the operation of this provision).

Part 13—Amendment of Supreme Court Act 1935

54—Amendment of section 130—Court fees

The proposed amendment to section 130 will allow for fees charged in respect of proceedings, or any step in proceedings, in the court's probate jurisdiction to be based on the value of the deceased person's estate or on any other basis, whether or not the fee exceeds the actual administrative cost incurred.

Part 14—Amendment of Taxation Administration Act 1996

55—Amendment of section 93—Appeal prohibited unless tax is paid

The requirement to pay 100% of tax before an appeal may be commenced is to be reduced to 50% of the tax to which the appeal relates.

Part 15—Amendment of Water Industry Act 2012

56—Repeal of section 93

57—Repeal of section 94

58—Amendment of section 115

These amendments relate to the decision not to impose the Save the River Murray levy after the 2014-15 financial year.

59—Transitional provisions

The repeal of section 93 of the Water Industry Act 2012 is not to affect any liability to pay the Save the River Murray levy for the 2014/2015 financial year, or any preceding financial year. The Save the River Murray Fund will be wound up on 1 July 2016.

Part 16—Repeal of Hindmarsh Island Bridge Act 1999

60—Repeal of Hindmarsh Island Bridge Act 1999

Amounts payable under the Hindmarsh Island Bridge Act 1999 in respect of a period commencing on or after 1 July 2015 will no longer be payable.

61—Transitional provision

The repeal of the Hindmarsh Island Bridge Act 1999 is not to affect any liability to make a payment under that Act or the Tripartite Deed in respect of any period concluding before 1 July 2015.

Debate adjourned on motion of Mr Pederick.

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