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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
State Revenue Legislation Further
Amendment Bill 2020
Contents
Page
1 Name of Act 2
2 Commencement 2
3 Amendment of Government Sector Finance Act 2018 No 55 2
Schedule 1 Amendment of Duties Act 1997 No 123 3
Schedule 2 Amendment of Land Tax Act 1956 No 27 7
Schedule 3 Amendment of Land Tax Management Act 1956 No 26 8
Schedule 4 Amendments relating to indexation 10
I certify that this public bill, which originated in the Legislative Assembly, has finally passed
the Legislative Council and the Legislative Assembly of New South Wales.
Clerk of the Legislative Assembly.
Legislative Assembly,
Sydney, , 2020
New South Wales
State Revenue Legislation Further
Amendment Bill 2020
Act No , 2020
An Act to make miscellaneous amendments to certain State revenue legislation; and for other
purposes.
I have examined this bill and find it to correspond in all respects with the bill as finally
passed by both Houses.
Assistant Speaker of the Legislative Assembly.
State Revenue Legislation Further Amendment Bill 2020 [NSW]
The Legislature of New South Wales enacts--
1 Name of Act
This Act is the State Revenue Legislation Further Amendment Act 2020.
2 Commencement
This Act commences on the date of assent to this Act.
3 Amendment of Government Sector Finance Act 2018 No 55
Section 4.2 Core content of Budget Papers
Insert after section 4.2(3)--
(3A) Subsection (3)(a) does not apply in relation to the budget aggregates for
the 2 prior years.
Page 2
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 1 Amendment of Duties Act 1997 No 123
Schedule 1 Amendment of Duties Act 1997 No 123
[1] Section 104JA
Insert after section 104J--
104JA Special provisions for discretionary trusts
(1) The trustee of a discretionary trust is taken to be a foreign trustee for the
purposes of this Chapter unless the trust prevents a foreign person from being
a beneficiary of the trust.
(2) If a discretionary trust prevents a foreign person from being a beneficiary of
the trust, the trustee of the trust is not in that capacity a foreign trustee for the
purposes of this Chapter.
(3) A discretionary trust is considered to prevent a foreign person from being a
beneficiary of the trust if (and only if) both of the following requirements are
satisfied--
(a) no potential beneficiary of the trust is a foreign person (the no foreign
beneficiary requirement),
(b) the terms of the trust are not capable of amendment in a manner that
would result in there being a potential beneficiary of the trust who is a
foreign person (the no amendment requirement).
Note. Under the transitional arrangements for this section in Schedule 1, the no
amendment requirement does not apply to a trust that satisfies the no foreign
beneficiary requirement immediately before the commencement of this section.
(4) A person is a potential beneficiary of a discretionary trust if the exercise or
failure to exercise a discretion under the terms of the trust can result in any
property of the trust being distributed to or applied for the benefit of the
person.
Note. A potential beneficiary is not limited to persons named in the trust instrument and
extends to the members of any class of persons to whom or for whose benefit trust
property can be distributed or applied pursuant to the discretions of the trust.
(5) For the removal of doubt, a person is not a potential beneficiary of a
discretionary trust if the terms of the trust prevent any property of the trust
from being distributed to or applied for the benefit of the person.
(6) In this section, property includes money, and a reference to the distribution or
application of property includes a reference to the payment of money.
[2] Section 104ZQ Stamping and endorsement of surcharge duty transactions
Insert after section 104ZQ(3)--
(4) The Chief Commissioner may approve a manner of stamping or endorsement
that does not require separate stamping or endorsement of an instrument for
purchaser duty and surcharge purchaser duty so that stamping or endorsement
by means of a single unique transaction identifier or reference number or a
single endorsement is sufficient to indicate payment of both purchaser duty
and surcharge purchaser duty.
[3] Section 107 Assignment of rights under call option dutiable as transfer
Insert at the end of section 107(2)(b)--
, and
(c) if A enters into an agreement or arrangement under which A, for
valuable consideration, relinquishes the right under a call option to
Page 3
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 1 Amendment of Duties Act 1997 No 123
require B to sell dutiable property and B agrees to sell the dutiable
property to a third person (C), A is to be treated as having assigned that
right under the call option so that the option is exerciseable by C.
[4] Section 146 Meaning of "landholder"
Omit "a threshold value" from section 146(1). Insert instead "an unencumbered value".
[5] Section 146A Threshold value of land holdings
Omit the section.
[6] Section 147A
Insert after section 147--
147A What does "land" include?
(1) For the purposes of this Chapter, land includes anything fixed to the land,
whether or not the thing--
(a) constitutes a fixture at law, or
(b) is owned separately from the land, or
(c) is notionally severed or considered to be legally separate from the land
as a result of the operation of any other Act or law.
(2) Land does not include anything excluded under section 163K from the
definition of goods in this Chapter.
(3) The Chief Commissioner may determine that land does not include a thing
fixed to land if--
(a) the thing is owned by a person who is not the person who owns the land
or an associated person of the person who owns the land, and
(b) the thing is not used in connection with the use of the land.
(4) For the removal of doubt, anything that is land because of this section is not
goods for the purposes of section 163G (Significant holdings in goods).
[7] Section 154
Omit the section. Insert instead--
154 Who is liable to pay the duty?
(1) The following persons are jointly and severally liable to pay duty chargeable
under this Part--
(a) the person who makes the relevant acquisition,
(b) the landholder or, if the landholder is a unit trust scheme, the trustee of
the landholder,
(c) if the relevant acquisition results from an aggregation of the interests of
the person referred to in paragraph (a) and other persons--each of those
other persons.
(2) A person who pays an amount of duty chargeable under this Part is entitled to
recover as a debt the amount paid (together with any penalty or interest paid
by the person in respect of that duty) from another person who is jointly and
severally liable to pay the duty, as follows--
(a) the landholder or trustee of the landholder is entitled to recover from a
person referred to in subsection (1)(a) or (c),
Page 4
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 1 Amendment of Duties Act 1997 No 123
(b) the person who makes the relevant acquisition is entitled to recover
from the other persons referred to in subsection (1)(c) (but not from the
landholder or trustee of the landholder) with recovery from each of
those other persons limited to an amount that is proportionate to the
interest of the other person,
(c) a person referred to in subsection (1)(c) is not entitled to recover.
(3) Any liability of a landholder, or the trustee of a landholder, to pay duty
chargeable under this Part (together with any interest or penalty tax payable)
is a charge on the land holdings of the landholder or trustee.
(4) A charge created by this section gives the Chief Commissioner an interest in
the land and, accordingly, the Chief Commissioner may lodge a caveat in
respect of the land under the Real Property Act 1900 to protect that interest.
(5) A caveat must be withdrawn when the amount of the duty for which the
landholder or trustee is liable (together with any interest or penalty tax
payable) has been paid.
(6) Section 45(3) of the Taxation Administration Act 1996 (which relates to rights
of contribution or indemnity between persons who are jointly and severally
liable for duty) does not apply to joint and several liability under this section.
[8] Schedule 1 Savings, transitional and other provisions
Insert at the end of the Schedule, with appropriate Part and clause numbering--
Part Provisions consequent on enactment of State
Revenue Legislation Further Amendment Act 2020
Definition
In this Part--
amending Act means the State Revenue Legislation Further Amendment Act
2020.
Surcharge purchaser duty--discretionary trusts
(1) Section 104JA extends to a surcharge duty transaction that occurred before the
commencement of that section.
(2) If the trustee of a discretionary trust is liable as a foreign trustee for surcharge
purchaser duty on a transfer of dutiable property that occurs before the
commencement of section 104JA, or after that commencement but before
midnight on 31 December 2020--
(a) the trustee is exempt from that duty if the terms of the trust have been
amended, before midnight on 31 December 2020 and before the due
date for payment of duty, so that the trust prevents a foreign person from
being a beneficiary, or
(b) if that duty has been paid, the trustee is entitled to a refund of that duty
if the terms of the trust have been amended, before midnight on
31 December 2020, so that the trust prevents a foreign person from
being a beneficiary.
(3) A trust that satisfies the no foreign beneficiary requirement under
section 104JA immediately before the commencement of that section is
considered for the purposes of that section to prevent a foreign person from
being a beneficiary of the trust (without having to satisfy the no amendment
requirement under that section).
Page 5
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 1 Amendment of Duties Act 1997 No 123
(4) Despite section 104JA, the trustee of an Australian testamentary trust is not in
that capacity a foreign trustee for the purposes of Chapter 2A (even if the trust
does not prevent a foreign person from being a beneficiary of the trust) if--
(a) for a trust arising from a will or codicil--the will or codicil was
executed on or before 31 December 2020, or
(b) for a trust arising from the administration of an intestate estate--the
deceased died before, or within 2 years after, the commencement of that
section, or
(c) for a trust resulting from an order of a court varying the application of
the provisions of a will or codicil or of the rules governing the
distribution of an intestate estate--the order was made on or before 31
December 2020.
(5) The Chief Commissioner may in a particular case extend the due date for
payment of surcharge purchaser duty by a trustee so that the trustee qualifies
for exemption from that duty under this clause if the terms of the trust have
been amended before midnight on 31 December 2020 (but after the date that
would otherwise be the due date for payment) so that the trust prevents a
foreign person from being a beneficiary.
(6) In this clause--
Australian testamentary trust means a discretionary trust arising from a will
or codicil or the administration of an intestate estate (or as a result of an order
of a court varying the application of the provisions of a will or codicil or of the
rules governing the distribution of an intestate estate) where the deceased was
not a foreign person immediately before his or her death.
due date for payment of duty means the date that is 3 months after the liability
for duty arises.
(7) Expressions in this clause have the same meanings as in section 104JA.
Assignment of rights under call option
Section 107(2)(c) does not apply to an agreement or arrangement referred to
in that paragraph that is entered into before the commencement of that
paragraph.
Acquisition of interests in landholders
The amendments made by the amending Act to Part 1 of Chapter 4 do not
apply to a relevant acquisition (within the meaning of that Chapter) made
before the commencement of those amendments or made after that
commencement pursuant to an agreement entered into before that
commencement.
Liability for landholder duty
Section 154 (as substituted by the amending Act) applies to duty chargeable
under Chapter 4 on or after the day it is substituted.
First Home Buyers Assistance Scheme
The amendment made by the amending Act to section 78A applies to the
following--
(a) agreements for sale or transfer entered into on or after 1 July 2020,
(b) transfers that occur on or after 1 July 2020, other than transfers made in
conformity with an agreement for sale or transfer entered into before 1
July 2020.
Page 6
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 2 Amendment of Land Tax Act 1956 No 27
Schedule 2 Amendment of Land Tax Act 1956 No 27
Section 5D
Insert after section 5C--
5D Surcharge land tax--discretionary trusts
(1) The trustee of a discretionary trust is taken to be a foreign person in that
capacity for the purposes of section 5A if the trust does not prevent a foreign
person from being a beneficiary of the trust.
(2) If a discretionary trust prevents a foreign person from being a beneficiary of
the trust, the trustee is not in that capacity a foreign person for the purposes of
section 5A.
(3) A discretionary trust is considered to prevent a foreign person from being a
beneficiary of the trust if (and only if) both of the following requirements are
satisfied--
(a) no potential beneficiary of the trust is a foreign person (the no foreign
beneficiary requirement),
(b) the terms of the trust are not capable of amendment in a manner that
would result in there being a potential beneficiary of the trust who is a
foreign person (the no amendment requirement).
Note. Under the transitional arrangements for this section in Schedule 2 to the
Principal Act, the no amendment requirement does not apply to a trust that
satisfies the no foreign beneficiary requirement immediately before the
commencement of this section.
(4) A person is a potential beneficiary of a discretionary trust if the exercise or
failure to exercise a discretion under the terms of the trust can result in any
property of the trust being distributed to or applied for the benefit of the
person.
Note. A potential beneficiary is not limited to persons named in the trust instrument and
extends to the members of any class of persons to whom or for whose benefit trust
property can be distributed or applied pursuant to the discretions of the trust.
(5) For the removal of doubt, a person is not a potential beneficiary of a
discretionary trust if the terms of the trust prevent any property of the trust
from being distributed to or applied for the benefit of the person.
(6) In this section, property includes money, and a reference to the distribution or
application of property includes a reference to the payment of money.
(7) Chapter 11A (Tax avoidance schemes) of the Duties Act 1997 applies in
respect of the avoidance of surcharge land tax in connection with the operation
of this section in the same way as that Chapter applies in respect of the
avoidance of duty under that Act, and for that purpose--
(a) a reference in that Chapter to duty is to be read as including a reference
to surcharge land tax, and
(b) a reference in that Chapter to "this Act" is to be read as a reference to
the Land Tax Act 1956 and the Land Tax Management Act 1956.
Page 7
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 3 Amendment of Land Tax Management Act 1956 No 26
Schedule 3 Amendment of Land Tax Management Act 1956
No 26
Schedule 2 Savings and transitional provisions
Insert at the end of the Schedule, with appropriate Part and clause numbering--
Part Provisions consequent on enactment of State
Revenue Legislation Further Amendment Act 2020
Amendments relating to discretionary trusts
(1) Section 5D of the Land Tax Act 1956 applies to the assessment of land tax
liability in respect of the 2017 land tax year and subsequent land tax years.
(2) If the trustee of a discretionary trust is liable in that capacity as a foreign
person for surcharge land tax in respect of the 2017, 2018, 2019 or 2020 land
tax year--
(a) the trustee is exempt from that land tax if the terms of the trust have been
amended, before payment of the land tax is due and before midnight on
31 December 2020, so that the trust prevents a foreign person from
being a beneficiary, or
(b) if that land tax has been paid, the trustee is entitled to a refund of that
land tax if the terms of the trust have been amended, before midnight on
31 December 2020, so that the trust prevents a foreign person from
being a beneficiary.
(3) A trust that satisfies the no foreign beneficiary requirement under section 5D
of the Land Tax Act 1956 immediately before the commencement of that
section is considered for the purposes of that section to prevent a foreign
person from being a beneficiary of the trust (without having to satisfy the no
amendment requirement under that section).
(4) Despite section 5D of the Land Tax Act 1956, the trustee of an Australian
testamentary trust is not in that capacity a foreign person for the purposes of
the application of section 5A of that Act to residential land owned by a foreign
person if--
(a) liability for land tax is required (under clause 9 of Schedule 1A to this
Act) to be assessed as if the deceased had not died and had continued to
use and occupy the land as his or her principal place of residence, or
(b) any of the following apply (even if the trust does not prevent a foreign
person from being a beneficiary of the trust)--
(i) for a trust arising from a will or codicil--the will or codicil was
executed on or before 31 December 2020,
(ii) for a trust arising from the administration of an intestate estate--
the deceased died before, or within 2 years after, the
commencement of section 5D of the Land Tax Act 1956,
(iii) for a trust resulting from an order of a court varying the
application of the provisions of a will or codicil or of the rules
governing the distribution of an intestate estate--the order was
made on or before 31 December 2020.
(5) The Chief Commissioner may in a particular case extend the date by which
payment of surcharge land tax by a trustee is due so that the trustee qualifies
for exemption from that surcharge land tax under this clause if the terms of the
trust have been amended before midnight on 31 December 2020 (but after the
Page 8
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 3 Amendment of Land Tax Management Act 1956 No 26
date by which payment would otherwise be due) so that the trust prevents a
foreign person from being a beneficiary.
(6) In this clause--
Australian testamentary trust means a discretionary trust arising from a will
or codicil or the administration of an intestate estate (or as a result of an order
of a court varying the application of the provisions of a will or codicil or of the
rules governing the distribution of an intestate estate) where the deceased was
not a foreign person immediately before his or her death.
(7) Expressions in this clause have the same meanings as in section 5D of the Land
Tax Act 1956.
Page 9
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 4 Amendments relating to indexation
Schedule 4 Amendments relating to indexation
4.1 Aboriginal Land Rights Regulation 2014
[1] Clauses 110 and 111
Omit the clauses. Insert instead--
110 Amount of community development levy
For the purposes of section 42T of the Act, the prescribed percentage of the
duty that would be chargeable under the Duties Act 1997 for a dutiable
transaction to which a threshold range specified in Column 1 of the table to this
clause applies is the percentage specified for that threshold range in Column 2.
Column 1 Column 2
Threshold range Amount of community development levy
4 or 5 100% of amount of duty
6 150% of amount of duty
Note. See Part 3 of Chapter 2 of the Duties Act 1997, which contains the threshold
ranges of dutiable value used to calculate the amount of duty chargeable under that
Part on a dutiable transaction.
111 Transactions to which community development levy does not apply
The community development levy does not apply to a dutiable transaction if
the dutiable value of the land concerned is the minimum threshold amount
specified for threshold range 4, or less.
Note. See Part 3 of Chapter 2 of the Duties Act 1997, which contains the threshold
ranges of dutiable value used to calculate the amount of duty chargeable under that
Part on a dutiable transaction.
[2] Schedule 6 Community development levy payable in respect of dutiable transactions
Omit the Schedule.
4.2 Duties Act 1997 No 123
Section 78A Duty payable if application approved
Omit section 78A(2). Insert instead--
(2) If an application concerning an eligible agreement or transfer is approved in
respect of property that has a private dwelling built on it and subsection (1)
does not apply to the agreement or transfer, the rate of duty chargeable in
respect of the agreement or transfer is to be calculated in accordance with the
following formula--
$800,000 - V
N - -------------------------------- D
$150,000
where--
N is the amount of duty (calculated in accordance with section 32) that would
otherwise be payable in respect of the agreement or transfer.
V is the dutiable value of the dutiable property that is the subject of the
agreement or transfer.
Page 10
State Revenue Legislation Further Amendment Bill 2020 [NSW]
Schedule 4 Amendments relating to indexation
D is the amount of duty (calculated in accordance with section 32) that would
otherwise be payable in respect of an agreement or transfer relating to property
that has a private dwelling built on it and has a dutiable value of $650,000.
Note. An agreement or transfer in respect of property that has a private dwelling built
on it is not an eligible agreement or transfer if the dutiable value of the property is
$800,000 or more. See section 74(3).
(2A) If an application concerning an eligible agreement or transfer is approved in
respect of property that comprises a vacant block of residential land and
subsection (1) does not apply to the agreement or transfer, the rate of duty
chargeable in respect of the agreement or transfer is to be calculated in
accordance with the following formula--
$450,000 - V
N - -------------------------------- D
$100,000
where--
N is the amount of duty (calculated in accordance with section 32) that would
otherwise be payable in respect of the agreement or transfer.
V is the dutiable value of the dutiable property that is the subject of the
agreement or transfer.
D is the amount of duty (calculated in accordance with section 32) that would
otherwise be payable in respect of an agreement or transfer relating to property
that comprises a vacant block of residential land and has a dutiable value of
$350,000.
Note. An agreement or transfer in respect of property that comprises a vacant block of
residential land is not an eligible agreement or transfer if the dutiable value of the
property is $450,000 or more. See section 74(3).
Page 11
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