Schedule 2D Exemption from or reduction in duty for certain conveyances
(Section 73AA)
1 The nature of the exemption scheme
The scheme is intended to provide a stamp duty exemption, at the discretion of the Chief Commissioner, in respect of:(a) the conveyance of a principal place of residence from a corporation or special trust to certain persons, or(b) the conveyance of any land owned as at 31 December 1986 by a special trust from the trust to certain persons.
In this Schedule:corporation has the same meaning as in the Companies (New South Wales) Code.
land includes any estate or interest in land.
land tax has the same meaning as in the Land Tax Management Act 1956.
principal shareholder, in relation to a corporation, means:
(a) any person (other than a corporation) whose voting entitlement (whether or not through the holding of shares) in the corporation is 50 per cent or more, or(b) any person (other than a corporation) who has a voting entitlement (whether or not through the holding of shares) in the corporation where all the persons who have a voting entitlement in the corporation have an equal voting entitlement.shareholder includes member.
special trust has the same meaning as in the Land Tax Management Act 1956.
voting entitlement has the meaning given by clause 3.
3 Meaning of “voting entitlement”
(1) A person’s voting entitlement in a corporation is that proportion of the total voting rights of all shareholders entitled to vote at general meetings of the corporation which the person is entitled to exercise, as a shareholder, at general meetings of the corporation.(2) A person is to be considered to have a voting entitlement in a corporation (“corporation A”) if the person has a voting entitlement in another corporation (“corporation B”) which itself has a voting entitlement in corporation A.(3) In a case to which subsection (2) applies, the person’s voting entitlement in corporation A is the proportion which results from multiplying the person’s voting entitlement in corporation B by corporation B’s voting entitlement in corporation A.(4) If a person has a voting entitlement in the same corporation under different provisions of this clause, or under different applications of the same provision of this clause, the person’s voting entitlement in the corporation is the aggregate of those entitlements.(5) In determining a person’s voting entitlement for the purposes of this clause, proxies and other authorities to vote held by a shareholder are to be disregarded.
4 Conveyance by corporation of principal place of residence to principal shareholder or spouse
(1) A conveyance of land by a corporation is eligible for exemption under this Schedule if:(a) the corporation owned the land on 11 September 1990, and(b) the transferee or each of the transferees is a principal shareholder in the corporation or the spouse of such a principal shareholder (whether or not the principal shareholder is one of the transferees), and(c) had the transferee or each of the transferees been an owner of the land within the meaning of the Land Tax Management Act 1956 on 31 December that last preceded the date of the conveyance:(i) the land would, by the operation of section 10 (1) (r) of the Land Tax Management Act 1956, be exempt from land tax in respect of the year in which the conveyance took effect, or(ii) land tax that, but for section 10 (4) of the Land Tax Management Act 1956, would be leviable or payable in respect of the land for the year in which the conveyance took effect would be reduced by the operation of section 10 (4) of that Act.(2) If land is conveyed by a corporation to 2 or more persons jointly, each of those persons is, for the purposes of this clause (but without affecting any entitlement to be considered to be a principal shareholder apart from this subclause), to be considered to be a principal shareholder in the corporation if:(a) each of the persons has a voting entitlement in the corporation, and(b) the aggregate of the voting entitlements in the corporation of each of those persons would be sufficient to qualify any one person as a principal shareholder in the corporation.
5 Conveyance of principal place of residence by special trust to beneficiary etc
A conveyance of land subject to a special trust is eligible for exemption under this Schedule if:(a) the land was subject to the special trust on 11 September 1990, and(b) the transferee or each of the transferees was:(i) the settlor of the land or the person who actually paid the purchase moneys for the land when the land was acquired by the trustee under the trust, or(ii) a beneficiary of the special trust immediately before the conveyance took effect and a beneficiary of the trust when the land was acquired by the trustee under the trust, or(iii) the spouse of a person referred to in subparagraph (i) or (ii), and(c) the transferee or each of the transferees will hold the land beneficially, and(d) had the transferee or each of the transferees been an owner of the land within the meaning of the Land Tax Management Act 1956 on 31 December that last preceded the date of the conveyance:(i) the land conveyed would, by the operation of section 10 (1) (r) of the Land Tax Management Act 1956, be exempt from land tax in respect of the year in which the conveyance took effect, or(ii) land tax that, but for section 10 (4) of the Land Tax Management Act 1956, would be leviable or payable in respect of the land for the year in which the conveyance took effect would be reduced by the operation of section 10 (4) of that Act.
6 Conveyance of principal place of residence by corporation to beneficiary of special trust
A conveyance of land by a corporation (not acting in the capacity of a trustee) is eligible for exemption under this Schedule if:(a) the corporation owned the land on 11 September 1990, and(b) the transferee or each of the transferees is a person, or the spouse of a person, who is a beneficiary under a special trust and was a beneficiary under the trust when the land was acquired by the corporation, and(c) the trustee under the special trust is a principal shareholder in the corporation (or would, if the trustee were not a corporation, be a principal shareholder in the corporation) at the time of the conveyance, and(d) had the transferee or each of the transferees been the owner within the meaning of the Land Tax Management Act 1956 on 31 December that last preceded the date of the conveyance:(i) the land conveyed would, by the operation of section 10 (1) (r) of the Land Tax Management Act 1956, be exempt from land tax in respect of the year in which the conveyance took effect, or(ii) land tax that, but for section 10 (4) of the Land Tax Management Act 1956, would be leviable or payable in respect of the land for the year in which the conveyance took effect would be reduced by the operation of section 10 (4) of that Act.
7 Conveyance by special trust to corporation
(1) A conveyance of land to a corporation by a person in the person’s capacity as trustee of a special trust is eligible for exemption under this Schedule if:(a) the land was subject to the special trust on, and at all times between, 31 December 1986 and 11 September 1990, and(b) section 160ZZN (Transfer of asset to wholly-owned company) of the Income Tax Assessment Act 1936 of the Commonwealth applies to the disposal of land effected by the conveyance, and(c) pursuant to that section, Part IIIA (Capital Gains and Capital Losses) of that Act (except that section) does not apply to that disposal.(2) Division 30 of Part 3 (Acquisitions of company and unit trust interests dutiable as conveyances of land) does not apply to the issue or allotment of shares in a corporation pursuant to a conveyance for which an exemption from the payment of duty is granted under this Schedule.
7A Conveyance of land not used and occupied solely as a principal place of residence
(1) If:(a) a conveyance of land would be eligible for exemption under clause 4, 5 or 6 but for the fact that the land is not land to which clause 4 (1) (c), 5 (d) or 6 (d) applies because it was not used and occupied solely as a principal place of residence at the relevant time, and(b) the land value of the land was entitled to be reduced under section 9C of the Land Tax Management Act 1956 at the relevant time,the amount on which the conveyance is to be charged with ad valorem duty is to be reduced in the same proportion as the land value was entitled to be reduced under section 9C of the Land Tax Management Act 1956.(2) This clause applies to a conveyance first executed on or after 14 September 1994.
(1) An application under this Schedule is to be made to the Chief Commissioner in a form approved by the Chief Commissioner, completed as required by that form.(2) If the land to which the conveyance relates is or includes land under the Real Property Act 1900, the application must be accompanied by an undertaking from the transferee in a form approved by the Chief Commissioner that:(a) the duty which would be payable on the conveyance but for the granting of an exemption under this Schedule will be paid if the transferee does not become the registered proprietor of the land within 2 months (or such longer period as the Chief Commissioner may at any time determine and notify in writing to the transferee) after the conveyance is stamped as exempt from the payment of duty, and(b) the transferee will, within 1 month after becoming the registered proprietor of the land (or such longer period as the Chief Commissioner may at any time determine and notify in writing to the transferee), provide evidence of that fact to the satisfaction of the Chief Commissioner.
9 Determination of applications
(1) An application is to be determined solely at the discretion of the Chief Commissioner whose decision is final.(2) An application is not to be granted unless the Chief Commissioner is satisfied that all land tax payable in respect of the land (including any additional land tax payable by way of penalty or otherwise) has been paid.(3) If the application is granted, the Chief Commissioner is to stamp the conveyance as exempt from the payment of duty.
10 Recovery of duty if undertaking not met
If a requirement of an undertaking from a transferee is not met, the Chief Commissioner may recover from the person, as a debt in a court of competent jurisdiction, the duty which, but for this Schedule, would be payable on the conveyance.
11 Application of scheme to company titles
This Schedule applies to the transfer of shares in a private company or units in a private trust scheme, the ownership of which entitles the owner to the exclusive possession, or substantially exclusive possession, of a dwelling in a building containing more than one separate dwelling, in the same way as it applies to a conveyance of land, with such modifications as may be necessary.