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1
Stamp Amendment
STAMP AMENDMENT BILL 1994
EXPLANATORY NOTES
GENERAL OUTLINE
Objectives of the Legislation
The objectives of the Bill are
(a) to facilitate the introduction of the new Clearing House Electronic
Sub-register System (CHESS) by the Australian Stock
Exchange;
(b) to co-operatively with other States and Territories change the
territorial connection for stamp duty on off-market transfers
of marketable securities;
(c) associated with (a) and (b), to provide for new exemptions
and changes to existing concessions;
(d) to exempt from stamp duty debentures issued by financial
corporations and their related corporations; and
(e) to provide for an evidentiary matter.
Reasons for the Bill
CHESS will facilitate the electronic transfer of marketable securities, in
place of paper transfers. The Bill provides for stamp duty to apply to these
electronic transfers on a co-operative basis with the other States and
Territories. The territorial connection for stamp duty on off-market
transfers of marketable securities is also to be changed in co-operation with
the other States and Territories. For example, stamp duty on transfers of
shares in Australian incorporated companies will apply according to the
State or Territory where the company is incorporated, or taken to be
incorporated, and not according to the location of register on which the
shares are registered. There are also -
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Stamp Amendment
(a) changes to existing concessions (e.g. for no duty instead of a
nominal duty to apply in certain cases and a time limit of 1 year
on exempt stock loans); and
(b) new exemptions for transfers to and from institutional custodial
trustees in certain circumstances and for certain transfers to and
from "entrepot nominee accounts" of CHESS participants.
As provided for in the 1994\95 State Budget, the Bill exempts from
stamp duty debentures issued by financial corporations and their related
corporations.
The Bill also contains a technical amendment to ensure the validity of
documents given by authorised officers under delegation from the
Commissioner of Stamp Duties in the Commissioner's name.
Estimated Cost for Government Implementation
The costs of measures in the Bill are not significant.
Consultation
The Australian Stock Exchange and revenue offices of other States and
Territories have been consulted in relation to the CHESS amendments.
NOTES ON PROVISIONS
Clause 1 cites the short title of this Act.
Clause 2 provides for the new exemption in clause 16 to commence on
Budget day (31 May 1994) and for the amendments relating CHESS and
changes to the basis for imposing transfer of marketable security stamp
duty to commence on 1 September 1994.
Clause 3 cites the name of the Act being amended.
Clause 4 excludes electronic transfers processed through CHESS, i.e.
SCH-regulated transfers, from the requirements of section 31A regarding
marketable security transfer instruments.
Clause 5 inserts new definitions used in provisions regarding the
electronic transfer of marketable securities processed through CHESS.
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Stamp Amendment
Clause 6 omits an exemption for sales and purchases of marketable
securities on ex-Queensland registers in certain circumstances. After 1
September 1994, the States will impose stamp duty on off-market share
transfers on the basis of the place of a company's incorporation and not the
State where the shares are registered. The clause also increases the record
retention period for brokers to 5 years.
Clause 7 provides for a single duty rate to apply to sales and purchases
of marketable securities.
Clause 8 excludes SCH-regulated transfers from the operation of section
31E relating to brokers' endorsements of transfer instruments.
Clause 9 excludes SCH-regulated transfers from the usual obligations on
companies to ensure that transfers are effected by duly stamped
instruments.
Clause 10 excludes SCH-regulated transfers from the record retention
requirements of section 31GA.
Clause 11 provides for the amendments to section 31H consequential
upon share transfer stamp duty applying from 1 September 1994 on the
basis of the place of a company's incorporation and not the State where the
shares are registered.
Clause 12 omits section 31I which will not be needed following changes
to the basis of imposing marketable security transfer stamp duty from 1
September 1994. It also preserves the operation of sections 31H and 31I as
they apply before 1 September 1994 to transfers before that date.
Clause 13 amends section 31J to provide for no duty to apply in certain
cases rather than $1.
Clause 14 inserts new sections 31K to 31X (the CHESS provisions) and
section 31Y.
Section 31K provides for the CHESS provisions to apply only to SCH-
regulated off-market transfers that are to be subject to stamp duty in
Queensland. Section 31L provides for the SCH regulated transfers to be
chargeable with the same duty as if they had been effected by an instrument
of transfer. Section 31M specifies the relevant SCH participant party to a
SCH-regulated transfer to be liable to duty. Section 31N sets out the record
requirements in relation to off-market SCH-regulated transfers.
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Stamp Amendment
Section 31O requires the relevant SCH participant to include in a transfer
document the particulars required by the Commissioner. Section 31P
provides for exemption for SCH regulated transfers where duty has already
been paid on a contract, agreement or instrument of transfer of the same
security to the same transferee in the same capacity. Section 31Q provides
for SCH participants to pay Queensland stamp duty on SCH regulated
transfers to the clearing house ("SCH") within 7 days of the end of the
month in which the transfer occurred and to provide the SCH with a
transaction statement in the form approved by the Commissioner. There is
also provision for the Commissioner to assess duty and penalty duty where
the Commissioner has reason to believe that a CHESS participant has
contravened this section. Under Section 31R, if an SCH participant does
not pay duty in accordance with section 31Q, the Commissioner may direct
the SCH not to allow the participant to pay duty under these provisions for a
period. Section 31S provides for the refund of stamp duty paid on
erroneous transactions.
Section 31T provides for the registration of the SCH for payment of duty
by return. Under section 31U, the SCH is to lodge a return, within 15 days
of the end of a month, of the amounts of duty received by it from
participants in respect of transfers by them during that month and remit the
said duty. There is also provision for the Commissioner to assess duty and
penalty duty where the Commissioner has reason to believe that the SCH
has contravened this section.
Section 31V requires the particulars stated to the SCH under section 31Q
to be kept by SCH for at least 5 years. Section 31W allows the disclosure
to the SCH by the Commissioner of information relating to CHESS.
Section 31X provides for the exemption for securities loans and securities
lending schemes to be withdrawn where the loan is for 12 months or more
and for penalty duty to apply. Section 31Y provides for those required to
take notice of whether or not duty has been paid to regard duty as having
been paid on an SCH-regulated transfer if it includes an SCH participant's
identification code.
Clause 15 excludes SCH-regulated transfers from the requirements of
section 53(11) regarding transfer instruments.
Clause 16 inserts a new exemption from "Mortgage" duty for
debentures issued by financial corporations and their related corporations
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Stamp Amendment
and for the instrument of trust and security documents underlying such issues.
Clause 17 provides for an interest rate penalty to be applied as an
alternative to prosecution under certain provisions.
Clause 18 is a technical amendment to ensure the validity of documents
given by authorised officers under delegation from the Commissioner.
Clause 19 amends Schedule 1 of the Stamp Act.
Clause 19(1) applies a flat 60 cent duty per $100 (or part thereof) for all
transfers of marketable securities. It also specifies the new basis on which
the States and Territories will impose transfer of marketable security duty
for off-market transfers from 1 September 1994.
Clause 19(2) to (4) provide for no duty to be payable in certain cases
where nominal duties now apply. Clause 19(5) and (6) specify the
circumstances where transfers to and from entrepot nominee accounts of
SCH participants will be exempt from duty. Clause 19(7) and (8) relate to
the existing exemption for securities loans and securities lending schemes.
They provide for the exemption to apply to transfers endorsed by SCH
participant and limit the exemption to loans and schemes for 12 months or
less. Clause 19(9) inserts a new exemption for transfers of marketable
securities to and from specified classes of nominees and trustees in
specified circumstances.
© The State of Queensland 1994