5AA—Minor interest may be disregarded for purposes of residential land
exemption
(1) In this
section—
"prescribed interest"—see subsections (2) and (3);
"prescribed land" means land that—
(a) is
owned by a natural person (the "resident") whose interest in the land is not
greater than 50% and is also owned by 1 or more other
persons; and
(b)
would, if it were owned solely by the resident, fall within 1 of the
grounds for exempting the land from land tax specified in
section 5(10)(a) to (bb) (inclusive);
"transaction" includes any form of conveyance, transfer, contract, agreement
or arrangement (whether or not in writing).
(2) If the resident's
interest in prescribed land is 5% or less, subsection (6) will
apply in relation to the interest (a "prescribed interest ) unless
the Commissioner, on the application of a person who, as an owner of the
prescribed land, has an interest exceeding 5% in the land, is
satisfied that there is no doubt that the resident's interest was created
solely for a purpose, or entirely for purposes, unrelated to reducing the
amount of land tax payable in respect of the land, or any other piece of land.
(3) If the resident's
interest in prescribed land exceeds 5% but is less than 50%,
subsection (6) will apply in relation to the interest (a
"prescribed interest") if the Commissioner forms the opinion that the purpose,
or 1 of the purposes, for the creation of the resident's interest was to
reduce the amount of land tax payable in respect of the land, or any other
piece of land.
(4) If
the Commissioner forms the opinion for the purposes of subsection (3)
that the purpose, or 1 of the purposes, for the creation of the
resident's interest was to reduce the amount of land tax payable in respect of
land—
(a)
subsection (6) will be taken to have applied in relation to the interest
from the date on which the interest was created; and
(b)
if—
(i)
the land was wholly or partially exempted from land tax
for a particular financial year; and
(ii)
the Commissioner is satisfied, on the basis of having
formed the opinion, that there were not, in respect of that financial year,
proper grounds for exempting the land from land tax,
the Commissioner may withdraw the exemption in respect of that financial year.
(5) For the purposes
of subsections (2) and (3), the Commissioner may have regard
to—
(a) the
nature of any relationships between the owners of the land, or between the
owners of 2 or more pieces of land and, if relevant, the
relationship between a trustee and a beneficiary or beneficiaries or
between 2 or more trustees or 2 or more beneficiaries; and
(b) the
lack of consideration, or the amount, value or source of the consideration,
provided in association with the creation of the interest; and
(c) the
form and substance of any transaction associated with the creation or
operation of the interest, including the legal and economic obligations of the
parties and the economic and commercial substance of any such transaction; and
(d) the
way in which any transaction associated with the creation or operation of the
interest was entered into or carried out; and
(e) any
other matter the Commissioner considers relevant.
(6) If this subsection
applies in relation to a prescribed interest under this section, the resident
holding the prescribed interest is taken not to be—
(a) an
owner of land for the purposes of section 5(10)(a) to (bb)
(inclusive) to the extent of the prescribed interest; or
(b) in a
case in which subsection (9)(a)(ii) applies in relation to a beneficiary,
a beneficiary under a relevant trust for the purposes of this Act.
(7) If
the Commissioner decides to reject an application of an owner of land under
subsection (2), the Commissioner must give notice of the decision to the
owner—
(a)
stating the decision; and
(b)
stating the grounds on which the decision is based.
(8) If
the Commissioner forms an opinion under subsection (3) so as to give rise
to the application of subsection (6), the Commissioner must give notice
of the operation of subsection (6) to each owner of the land—
(a)
stating the fact that the opinion has been formed, and setting out its effect
under this section; and
(b)
stating the grounds on which the opinion is based.
(9) For the purposes
of this section—
(a) a
reference to an interest in land is a reference—
(i)
to an estate, interest or other circumstance that makes a
person an owner of land under this Act (but does not include an interest
consisting only of a right of occupation); or
(ii)
to an interest that a person has in land that arises by
virtue of a trust, either as trustee or beneficiary, other than—
(A) a trust arising because of a contract
to purchase or acquire an estate or interest in the land; or
(B) an interest arising in any other
circumstances prescribed by the regulations; and
(b) an
interest may be or become subject to the operation of this section no matter
when it was created, including in a case where the interest was created before
the commencement of this section.