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LAND TAX ACT 1936 - SECT 13A

13A—Land tax for discretionary trust if beneficiary notified to Commissioner

        (1)         A trustee of a discretionary trust to which land is subject may, not later than 30 June 2021, lodge with the Commissioner a written notice specifying 1 beneficiary of the trust who, subject to subsections (13) and (14), is to be taken to be the designated beneficiary of the trust for the purposes of this section.

        (2)         For the avoidance of doubt, a trust may only have 1 person who is the designated beneficiary for the purposes of this section (and may only substitute the designated beneficiary by notice lodged under subsection (5)).

        (3)         A notice takes effect, at the option of the trustee (which must be specified in the notice), for the tax year in which the notice is lodged or for the following year, and remains in force until it is withdrawn by the trustee or until the designated beneficiary notifies the Commissioner, in writing, that they no longer consent to being the designated beneficiary (in which case the notice is deemed to have been withdrawn by the trustee).

        (4)         A designated beneficiary may be substituted—

            (a)         if the designated beneficiary dies or becomes incapacitated; or

            (b)         if the Commissioner is satisfied that, because of a marriage, de facto relationship or domestic relationship that has broken down irretrievably, the designated beneficiary will no longer be a beneficiary of the trust; or

            (c)         in circumstances prescribed by the regulations.

        (5)         If the designated beneficiary may be substituted in accordance with subsection (4), a trustee of the trust may lodge with the Commissioner a written notice

            (a)         advising the Commissioner of the grounds on which the designated beneficiary may be substituted; and

            (b)         specifying the name of another beneficiary of the trust who is to be taken to be the designated beneficiary for the purposes of this section in place of the beneficiary named in the original notice.

        (6)         If a written notice is lodged under subsection (5)—

            (a)         subject to subsection (13), the beneficiary of the trust specified in the notice becomes the designated beneficiary of the trust; and

            (b)         the notice under subsection (1) is taken to have been varied accordingly.

        (7)         A notice under this section must be in the form, and contain the information, determined by the Commissioner.

        (8)         Despite subsection (1), if a trustee withdraws a notice that is in force under this section in respect of a discretionary trust, the trustee cannot lodge another notice under this section in respect of that discretionary trust.

        (9)         If a notice is in force under this section for a discretionary trust, the following provisions apply:

            (a)         the designated beneficiary of the trust is deemed, for the purposes of this Act (other than a residential land exemption), to be the owner (but not to the exclusion of the trustee) of land that was subject to the trust at the prescribed time ("pre-existing trust land") and is liable for land tax on that land accordingly, together with any other land owned by the beneficiary, assessed in accordance with section 8A(1) at the rates set out in Schedule 1 Part 2;

            (b)         however, if any pre-existing trust land

                  (i)         constitutes the principal place of residence of the designated beneficiary; and

                  (ii)         would, if it were owned by a natural person, be wholly or partially exempted from land tax under a residential land exemption,

the designated beneficiary is deemed to be the owner of the land for the purposes of the residential land exemptions;

            (c)         the trustee for the trust is to be assessed for land tax on the whole of the land subject to the trust as if the land were the only land owned by the trustee

                  (i)         in the case of pre-existing trust land—in accordance with section 8A(1) at the rates set out in Schedule 1 Part 2; or

                  (ii)         in the case of land that became subject to the trust after the prescribed time ("subsequent trust land")—in accordance with section 8A(1a) at the rates set out in Schedule 1 Part 3; or

                  (iii)         in the case where land subject to the trust consists of both pre-existing trust land and subsequent trust land—in accordance with the following formula:

1936.2318.UN04.jpg

Where—

"L" is the land tax assessed for the trustee

"R" "1" is the applicable rate of land tax set out in Schedule 1 Part 2

"R" "2" is the applicable rate of land tax set out in Schedule 1 Part 3

"T" is the total taxable value of all taxable land subject to the trust

"A" is the total taxable value of the pre-existing trust land subject to the trust

"B" is the total taxable value of the subsequent trust land subject to the trust.

Note—

If the designated beneficiary is exempt from land tax under paragraph (b), the trustee will also be exempt because the effect of the residential land exemptions is to render the land exempt from land tax.

        (10)         If land subject to the trust constitutes the principal place of residence of the trustee, this section does not affect the application of a residential land exemption to the land.

        (11)         Any land tax payable by the trustee under subsection (9)(c) in respect of pre-existing trust land is to be deducted from land tax payable by the designated beneficiary.

Note—

The deduction is applied to the total land tax assessed for the designated beneficiary and not just to the land tax assessed for the land subject to the trust.

        (12)         If a deduction under subsection (11) would result in a negative amount—

            (a)         zero is to be substituted for that amount; and

            (b)         the amount of the difference between that amount and zero will not be credited to any liability for land tax under this Act.

        (13)         Subject to subsection (14), a beneficiary of a trust may be the designated beneficiary of the trust for the purposes of this section only if the beneficiary

            (a)         is a natural person; and

            (b)         was a beneficiary of the trust at the prescribed time; and

            (c)         is over 18 years of age; and

            (d)         has verified by statutory declaration that the beneficiary consents to being the designated beneficiary of the trust.

        (14)         Where no beneficiaries of a trust are over 18 years of age, a notice under this section may specify that the trustee is to be taken to be the designated beneficiary (as if the trustee were a beneficiary of the trust) but only if the trustee is a natural person.

        (15)         For the purposes of this section, a reference to a discretionary trust does not include a public unit trust scheme.

        (16)         In this section—

"prescribed time" means midnight on the day on which the Land Tax (Miscellaneous) Amendment Act 2019 was introduced in the House of Assembly.



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