Chapter 11 General exemptions from duty
Part 1 Corporate reconstructions and consolidations
(1) In this Part:corporate consolidation transaction—see section 273D.
corporate group—see section 273E.
corporate reconstruction transaction—see section 273C.
corporation includes a unit trust scheme.
security, of a corporation, means:
(a) in the case of a corporation other than a unit trust scheme, an issued share of the corporation, or(b) in the case of a unit trust scheme, a unit issued under the scheme.(2) A reference in this Part to anything done by or held by a unit trust scheme (including any voting control held by a unit trust scheme) is a reference to anything done by or held by a trustee of the unit trust scheme as trustee of that unit trust scheme.
273B Exemption for corporate reconstruction and corporate consolidation transactions
(1) Duty under this Act is not chargeable on a transaction if the Chief Commissioner is satisfied, on application by a party to the transaction, that:(a) the transaction is a corporate reconstruction transaction, and(b) the transaction, or the series of transactions of which the transaction is a part, is undertaken for the purpose of either or both of the following:(i) changing the structure of a corporate group,(ii) changing the holding of assets within a corporate group, and(c) the transaction, or the series of transactions of which the transaction is a part:(i) is not undertaken for a purpose of avoiding or reducing duty under this Act on another transaction, and(ii) is not undertaken for the sole or dominant purpose of avoiding or reducing a liability for tax, other than duty under this Act, under a law of an Australian jurisdiction.(2) Duty under this Act is not chargeable on a transaction if the Chief Commissioner is satisfied, on application by a party to the transaction, that the transaction is a corporate consolidation transaction.
273C Corporate reconstruction transaction
For the purposes of this Part, a corporate reconstruction transaction means:(a) a transfer, or agreement for sale or transfer, of dutiable property between corporations that are members of the same corporate group, or(b) a surrender of an interest in land by a corporation to a corporation who is a member of the same corporate group, or(c) a vesting of dutiable property if the dutiable property was held, immediately before the vesting, and continues to be held, immediately after the vesting, by corporations who are members of the same corporate group, or(d) an acquisition of an interest in a landholder (within the meaning of Chapter 4) by a corporation if the interest is acquired from another corporation who is a member of the same corporate group, or(e) an application to register a motor vehicle as a result of a transfer of the vehicle between corporations who are members of the same corporate group.
273D Corporate consolidation transaction
(1) For the purposes of this Part, a corporate consolidation transaction means a dutiable transaction or an acquisition of an interest in a landholder (within the meaning of Chapter 4) that:(a) is made to interpose a corporation (the head corporation) between another corporation (the affected corporation) and the holders of the affected corporation’s securities, and(b) is a transfer or an acquisition of securities of:(i) the affected corporation by the head corporation for which the only consideration given by the head corporation is the issue or transfer of its securities to the person from whom the affected corporation’s securities were transferred or acquired, or(ii) the head corporation by a holder of securities of the affected corporation.(2) A dutiable transaction or an acquisition of an interest in a landholder is not a corporate consolidation transaction if, immediately before the transaction or acquisition occurred, the head corporation held dutiable property or a vehicle or an interest in a corporation.(3) A dutiable transaction or an acquisition of an interest in a landholder is not a corporate consolidation transaction unless, immediately after the issue or transfer of the head corporation’s securities:(a) each person who holds those securities (a security holder) is a person who held securities of the affected corporation immediately before the securities of the affected corporation were transferred to or acquired by the head corporation, and(b) the proportion of those securities held by each security holder is the same as proportion of the securities of the affected corporation held by each security holder before the issue or transfer.
273E Meaning of “corporate group”
(1) For the purposes of this Part, a corporate group consists of a parent corporation and its subsidiaries.(2) A corporation is the parent corporation of another corporation (which is the subsidiary of the first corporation) if the first corporation, directly or indirectly:(a) holds at least 90% of the securities of the other corporation, and(b) holds voting control over the other corporation.(3) The first corporation holds voting control over the other corporation if the first corporation has the ability to cast, or control the casting of, at least 90% of the maximum number of votes that may be cast at a general meeting of that corporation (other than votes to which a person is entitled under the provisions of a debenture or trust deed securing the issue of a debenture).(4) The corporate group for a corporation, all of the securities of which are stapled to the securities of one or more other corporations, includes all of those other corporations and their subsidiaries.(5) A corporation that is a unit trust scheme is taken to be a member of a corporate group for the purposes of a corporate reconstruction transaction if the transaction is between the trustee of the unit trust scheme, acting as trustee of the scheme, and another corporation that is a member of the same corporate group as the unit trust scheme.(6) A corporation is not a member of a corporate group for the purposes of a corporate reconstruction transaction if the corporation is acting in the capacity of trustee of:(a) a unit trust scheme that is not a member of the same corporate group as the other party to the transaction, or(b) a discretionary trust, or(c) a trust (not being a unit trust scheme) for any person who is not a member of the corporate group.
273F Applications for exemptions
(1) An application for an exemption from duty for a corporate reconstruction transaction or a corporate consolidation transaction is to be made to the Chief Commissioner:(a) in the approved form, and(b) before the date of the transaction or no later than 5 years after the date of assessment of the transaction.(2) An exemption may be granted with or without conditions.(3) It is a condition of every exemption granted in relation to an application made before the date of the relevant transaction that the applicant must notify the Chief Commissioner in writing as soon as practicable if there is any material change on or before that date in the matters disclosed in the application.(4) The Chief Commissioner must reassess any duty charged on a transaction if an exemption is granted after the date of assessment of the transaction.(5) The Chief Commissioner may revoke an exemption for a corporate reconstruction transaction if the Chief Commissioner is satisfied, because of new information not disclosed in the application for exemption, that the exemption should not have been granted.(6) The Chief Commissioner must assess the liability for duty on a corporate reconstruction transaction for which an exemption is revoked and each member (at the date of the transaction) of the corporate group to which the transaction relates is jointly and severally liable to pay the duty chargeable on the transaction.
274 Transfer of certain business property between family members
(1) Duty under this Act is not chargeable in respect of a transfer or agreement for the sale or transfer of land, a lease of land, or a transfer or assignment of a lease or permit in respect of land, used for primary production together with any other property that is an integral part of the business of primary production, if the Chief Commissioner is satisfied that:(a) the transferor, lessor or assignor, or the person directing the transferor, lessor or assignor, is a member of the family of the transferee, lessee or assignee, and(b) the land was land used for primary production in connection with a business carried on by the transferee, lessee or assignee, or by a member of the family of the transferee, lessee or assignee, (whether alone or with others) immediately before the transaction or the date of first execution of the instrument, and(c) the business is to continue to be carried on by the transferee, lessee or assignee (whether alone or with others).(2) Duty under this Act is not chargeable in respect of a transfer of shares in a share management fishery within the meaning of the Fisheries Management Act 1994, if the Chief Commissioner is satisfied that:(a) the transferor, or the person directing the transferor, is a member of the family of the transferee, and(b) the shares are held in connection with a fishing business carried on by the member of the family of the transferee (whether alone or with others) immediately before the transaction or the date of first execution of the instrument, and(c) the business is to continue to be carried on by the transferee (whether alone or with others).Note. Duty on the transfer of shares in a share management fishery is abolished on 1 July 2013. This exemption is relevant only to a transfer of shares in a share management fishery that occurs before that date. See Part 4 of Chapter 2.(3) For the purposes of this section, the person directing a transferor, lessor or assignor is:(a) in the case of a transferor, lessor or assignor who is acting in the capacity of executor of a deceased estate—the deceased person, or(b) in the case of a transferor, lessor or assignor which is a proprietary limited company—a shareholder or shareholders in the company who:(i) are beneficially entitled to those shares, and(ii) are entitled to vote at meetings of the company, and(iii) are entitled as shareholders to not less than 25% of the assets of the company on winding up, being an entitlement that existed for at least 3 years prior to the date of the transfer, lease or assignment or that existed from the date of incorporation of the company, or(c) in the case of a transferor, lessor or assignor acting in the capacity of trustee of a bare trust—a person who is a named beneficiary of the trust, or(d) in the case of a transferor, lessor or assignor acting in the capacity of trustee of a discretionary trust—a person or persons who are entitled (as takers in default of appointment) to not less than a 25% interest in the capital of the trust, being an entitlement that existed for at least 3 years prior to the date of the transfer, lease or assignment, or that existed from the date of establishment of the trust, or(e) in the case of a transferor, lessor or assignor acting in the capacity of trustee of a private unit trust scheme—a unit holder or unit holders in the unit trust scheme who:(i) hold the units beneficially, and(ii) are entitled (as unit holders) to not less than 25% of the assets of the unit trust scheme on winding up, being an entitlement that existed for at least 3 years prior to the date of the transfer, lease or assignment, or from the date of establishment of the trust.(4) In the case of a transfer, lease or assignment by a proprietary limited company or unit trust scheme (a subsidiary entity) that is owned by another proprietary limited company or unit trust scheme (the parent entity), a person is taken to be a person directing the subsidiary entity if the Chief Commissioner is satisfied that, had the parent entity been the transferor, lessor or assignor, the person would be the person directing the parent entity under subsection (3).(5) Except as provided by subsections (3) and (4), there are no other cases in which a person is considered to be a person directing a transferor, lessor or assignor.(5A) This section does not apply if the transferee acquires the land or shares concerned as a trustee.(6) In this section:member, of a transferee’s family, means each of the following persons:
(a) the transferee’s spouse,(b) a parent of the transferee or the transferee’s spouse,(c) a grandparent of the transferee or the transferee’s spouse,(d) a brother, sister, nephew, niece, uncle or aunt of the transferee or the transferee’s spouse,(e) a child or grandchild of the transferee or the transferee’s spouse,(f) the spouse of anyone mentioned in paragraph (b), (c), (d) or (e).spouse includes a former spouse, a de facto partner and a former de facto partner.
Note. Land used for primary production is defined in the Dictionary.
275 Charitable and benevolent bodies
(1) Duty under this Act is not chargeable on the following:(a) a transfer, or an agreement for the sale or transfer, of dutiable property to an exempt charitable or benevolent body,(b) a declaration of trust over dutiable property held or to be held on trust for an exempt charitable or benevolent body,(c) a surrender of an interest in land in New South Wales to an exempt charitable or benevolent body,(d) a vesting of dutiable property in an exempt charitable or benevolent body,(e) a lease of dutiable property to an exempt charitable or benevolent body,(f) a mortgage given by or on behalf of an exempt charitable or benevolent body.(1A) Duty under section 58 (Establishment of a trust relating to unidentified property and non-dutiable property) is not chargeable on an instrument that declares a trust over property held or to be held on trust for an exempt charitable or benevolent body.(2) (Repealed)(2A) Landholder duty is not chargeable on the acquisition of an interest in a landholder by an exempt charitable or benevolent body.(3) In this section:exempt charitable or benevolent body means:
(a) any body corporate, society, institution or other organisation for the time being approved by the Chief Commissioner for the purposes of this paragraph whose resources are, in accordance with its rules or objects, used wholly or predominantly for:(i) the relief of poverty in Australia, or(ii) the promotion of education in Australia, or(b) any body corporate, society, institution or other organisation that, in the opinion of the Chief Commissioner, is of a charitable or benevolent nature, or has as its primary object the promotion of the interests of Aborigines and if:(i) (in the application of this definition for the purposes of subsection (1) or (1A)) the dutiable transaction or instrument is for such purposes as the Chief Commissioner may approve in accordance with guidelines approved by the Treasurer, or(ii) (Repealed)(iii) (in the application of this definition for the purposes of subsection (2A)) the land holdings of the landholder are being used or are to be used for such purposes as the Chief Commissioner may approve in accordance with guidelines approved by the Treasurer, or(c) any person acting in the person’s capacity as trustee for a body corporate, society, institution or other organisation referred to in paragraph (a) or (b).landholder duty means the duty chargeable under Chapter 4.
275A Partial exemption for certain transactions by charitable and benevolent bodies
(1) If the Chief Commissioner is satisfied, in relation to any dutiable transaction by which an exempt charitable or benevolent body acquires land or an interest in land, that the land concerned is used or to be used by the charitable or benevolent body partly for an exempt purpose, the dutiable value of the land concerned is, for the purposes of charging duty under Chapter 2, to be reduced by the portion of that dutiable value that is referable to the portion of the land used or to be used for an exempt purpose.(2), (3) (Repealed)(4) If the Chief Commissioner is satisfied, in relation to a mortgage given by or on behalf of a charitable or benevolent body, that the land the subject of the mortgage is used or to be used partly for an exempt purpose, the amount secured by the mortgage is, for the purpose of charging duty under Chapter 7, to be reduced by the proportion of the amount secured that is referable to the portion of the land used or to be used for an exempt purpose.(5) If the Chief Commissioner is satisfied, in relation to an acquisition of an interest in a landholder by a charitable or benevolent body, that any of the land holdings of the landholder are used or to be used for an exempt purpose, the unencumbered value of that land holding is to be disregarded when calculating the duty chargeable on the acquisition under Chapter 4.(6) This section does not limit section 275.(7) In this section:charitable or benevolent body means any body corporate, society, institution or other organisation that, in the opinion of the Chief Commissioner, is of a charitable or benevolent nature, or has as its primary object the promotion of the interests of Aborigines.
exempt purpose means a purpose approved by the Chief Commissioner under section 275.
Duty under this Act is not chargeable on:(a) a dutiable transaction in respect of dutiable property, if a public hospital would be the person liable to pay the duty, or(b) an instrument executed by or on behalf of a public hospital, if the public hospital would be the person liable to pay the duty.
277 Councils and county councils
(1) Duty under this Act is not chargeable in the case of a body, being a council or county council under the Local Government Act 1993, on the following:(a) a dutiable transaction in respect of dutiable property if the body is the person described in this Act as the person liable to pay the duty,(b) an instrument executed by or on behalf of any such body if the body is the person described in this Act as the person liable to pay the duty,(c) an application by any such body to register a motor vehicle,(d) any insurance taken out by or on behalf of any such body.(2) However, this section does not exempt dutiable transactions, instruments or insurance issued, given, taken out, or executed by, to or on behalf of any such body in connection with or arising from the establishment, acquisition and operation of any trading undertaking, being:(a) the supply of electricity, gas, liquefied petroleum gas or hydraulic power and the supply and installation of associated fittings and appliances, or(b) the operation of a coal mine and the supply and distribution of coal, or(c) the operation of a public transport service, or(d) the supply of building materials.
278 Department of Housing and Aboriginal Housing Office tenants
(1) Duty under this Act is not chargeable on an agreement for the sale or transfer, or a transfer, of land, or a mortgage executed to finance or assist the purchase of that land (but only to the extent to which the amount secured by the mortgage is to finance or assist that purchase), or a mortgage in support of that mortgage, if the purchaser or borrower, or at least one of the purchasers or borrowers:(a) is, at the date of the transaction or the date of the first execution of the instrument, an eligible tenant, and(b) will obtain not less than 25% of the beneficial ownership of the land, and(c) intends to occupy the land as his or her principal place of residence.(2) For the purposes of this section, a person is an eligible tenant if the person:(a) is a tenant of the Department of Housing, or(b) is a tenant under the Community Tenancy Scheme administered within the Department of Family and Community Services, or(c) is a tenant of the Aboriginal Housing Office.(3) This section applies in respect of an agreement for sale or transfer, or a transfer, of land in respect of which an eligible tenant obtains less than 100% of the beneficial ownership of the land only if:(a) the other purchasers are natural persons, and(b) the Chief Commissioner is satisfied that each of those other purchasers is a member of the eligible tenant’s family or a person who is genuinely assisting the eligible tenant to acquire the land as his or her principal place of residence.(4) For the purpose of subsection (3), the New South Wales Land and Housing Corporation is not considered to be a purchaser.(5) The exemption conferred by this section is conditional on the eligible tenant occupying the land concerned as his or her principal place of residence for a continuous period of at least 6 months, with that occupation starting within 12 months (or such longer period as the Chief Commissioner may approve) after completion of the agreement for sale or transfer, or transfer, of the land. This requirement is referred to as the residence requirement.(6) The Chief Commissioner may, if satisfied that there are good reasons to do so in a particular case:(a) modify the residence requirement by approving a shorter period of occupation by an eligible tenant, or(b) exempt an eligible tenant from compliance with the residence requirement.(7) If an eligible tenant fails to comply with the residence requirement, the eligible tenant must, within 14 days after the end of the period for compliance:(a) give written notice of that fact to the Chief Commissioner, and(b) pay to the Chief Commissioner the duty that would have been payable on the transactions or instruments concerned if they had not been exempt from duty under this section.(8) A person who fails to comply with subsection (7) is guilty of an offence.Maximum penalty: 50 penalty units.
(9) For the purposes of this section, a person is a member of an eligible tenant’s family if:(a) one is the spouse or de facto partner of the other, or(b) the relationship between them is that of parent and child, brothers, sisters, or brother and sister.(10) This section does not prevent section 221B from applying in respect of a mortgage.Note. Section 221B extends a general mortgage duty exemption to all mortgages associated with owner occupied housing, and takes effect on and from 1 September 2007.
Duty under this Act is not chargeable on any instrument executed by or on behalf of a Specialised Agency within the meaning of the Convention on the Privileges and Immunities of the Specialised Agencies that was approved by the General Assembly of the United Nations on 21 November 1947 in respect of which instrument the Specialised Agency is the person described in this Act as the person liable to pay the duty.
Duty under this Act is not chargeable, in the case of an organisation that is the New South Wales Aboriginal Land Council, a Regional Aboriginal Land Council, or a Local Aboriginal Land Council, within the meaning of the Aboriginal Land Rights Act 1983, on the following:(a) a dutiable transaction in respect of dutiable property if the organisation is the person described in this Act as the person liable to pay the duty,(b) an instrument executed by or on behalf of the organisation if the organisation is the person described in this Act as the person liable to pay the duty,(c) an application by the organisation to register a motor vehicle,(d) any insurance taken out by or on behalf of the organisation.
282 Mortgage-backed securities
(1) Duty under this Act is not chargeable in respect of a mortgage to the extent that it is a mortgage over the interest of a person in a pool of mortgages relating to debt securities that are mortgage-backed securities issued by the person to secure the repayment of financial accommodation provided to the person.(2) Duty under this Act is not chargeable in respect of a mortgage to the extent that it is a mortgage of a mortgage or pool of mortgages or part of a pool of mortgages in connection with creating, issuing, marketing or securing a mortgage-backed security.(3) Duty under this Act is not chargeable in respect of a transaction or instrument to the extent that it is, or effects:(a) the issue or making of a mortgage-backed security, or(b) the transfer or assignment of or other dealing with a mortgage-backed security, or(c) the discharge, cancellation or termination of a mortgage-backed security.(4) Duty under this Act is not chargeable in respect of a mortgage executed on or after 1 July 1998 to the extent that it is a mortgage of a mortgage or pool of mortgages or part of a pool of mortgages for the purpose of creating, issuing, marketing or securing a mortgage-backed security:(a) to a person entitled to a mortgage-backed security or a trustee or agent for such a person, or(b) by or to a person who issues, makes or endorses a mortgage-backed security, or(c) to a person who provides security (whether as a guarantor, surety or otherwise) to a person entitled to a mortgage-backed security or a trustee or agent for such a person.(5) In this section, and in the definitions of mortgage-backed security and pool of mortgages in the Dictionary, a reference to a mortgage includes a reference to a charge.Note. Mortgage-backed security and pool of mortgages are defined in the Dictionary.
283 Instruments issued for the purpose of creating, issuing or marketing mortgage-backed securities
Duty under this Act is not chargeable on an instrument that, in the opinion of the Chief Commissioner, was executed for the purpose of creating, issuing or marketing mortgage-backed securities to the extent that it was executed for that purpose.
(1) Duty is not chargeable in respect of a transaction or instrument to the extent that it is, or effects, any of the following:(a) the issue or making of an asset-backed security,(b) the transfer or assignment of or other dealing with an asset-backed security,(c) the discharge, cancellation or termination of an asset-backed security,(d) an instrument that, in the Chief Commissioner’s opinion, was executed for the purpose of creating, issuing or marketing asset-backed securities,(e) a mortgage over the interest of a person in a pool of assets, being a mortgage relating to debt securities that are asset-backed securities issued by the person to secure the repayment of financial accommodation provided to the person,(f) a mortgage over a financial asset or pool of assets or part of a pool of assets in connection with creating, issuing, marketing or securing an asset-backed security,(g) a policy of insurance covering any or all assets in a pool of assets acquired or held for the purpose of issuing asset-backed securities, but only so far as the instrument relates to asset-backed securities.Note. Asset-backed security and pool of assets are defined in the Dictionary.(2) In this section, mortgage includes a charge.
284A Joint government enterprise—water savings projects
Duty under this Act is not chargeable, in the case of a joint government enterprise that has the function of allocating funds for water savings projects, on the following:(a) a dutiable transaction in respect of dutiable property if the enterprise is the person described in this Act as the person liable to pay the duty,(b) an instrument executed by or on behalf of the enterprise if the enterprise is the person described in this Act as the person liable to pay the duty,(c) an application by the enterprise to register a motor vehicle,(d) any insurance taken out by or on behalf of the enterprise.
284B Restructuring of unit trust for land tax purposes
(1) Duty under this Act is not chargeable in respect of an instrument executed on or after 6 June 2006 and before 1 January 2008 that effects a variation to a trust deed for a unit trust (within the meaning of Schedule 1AA to the Land Tax Management Act 1956) if:(a) before the instrument is executed, unit holders in the unit trust have fixed entitlements under the trust, and(b) the purpose of the variation is to enable the unit trust to satisfy the relevant criteria (within the meaning of section 3A of the Land Tax Management Act 1956) and, accordingly, to be treated as a fixed trust under that section, and(c) the variation does not directly or indirectly result in a change in the proportion of any income or capital to which a unit holder is entitled under the trust.(2) Unit holders in a unit trust have fixed entitlements under the trust if:(a) the unit holders are entitled to a fixed proportion of the income or capital distributions of the trust (if any are made) based on the number or class of units owned by them, and(b) the entitlements referred to in paragraph (a) cannot be removed, restricted or otherwise affected by the exercise of a discretion, or by a failure to exercise a discretion, conferred on any person under the trust.