After section 90 of the Principal Act , the following Part is inserted in Chapter 3:

PART 5 - Transactions involving put and call options

Division 1 - Making of put and call option

91.     Application of Act to put and call option, &c.

For the purposes of this Act, a put and call option is taken to be an agreement for sale of dutiable property referred to in section 6(1)(b)(i) and, accordingly –

(a) duty is chargeable on the put and call option under Chapter 2 ; and

(b) the dutiable property which is the subject of the call option and the put option is taken to be property which is transferred by that agreement for sale of dutiable property; and

(c) the person who has the right to acquire the dutiable property under that put and call option is taken to be the purchaser or transferee of the dutiable property under that agreement for sale of dutiable property.

92.     When does liability for duty arise?

The liability for duty under this Act in relation to the making of a put and call option arises on the day on which the option is made.

Division 2 - Assignment of rights under put and call option

93.     Duty chargeable on assignment of rights under put and call option

If a right to acquire dutiable property under a put and call option is assigned to another person, that assignment is taken to be a transfer of dutiable property referred to in section 6(1)(a) and, accordingly –

(a) duty is chargeable on the assignment under Chapter 2 ; and

(b) the dutiable property which is the subject of the call option and the put option is taken to be the dutiable property so transferred; and

(c) the person to whom is assigned the right to acquire the dutiable property under that put and call option is taken to be the purchaser or transferee of the dutiable property so transferred; and

(d) the transfer of dutiable property is taken to occur when the right is assigned.

94.     When does liability for duty arise?

The liability for duty under this Act in relation to a call option assignment arises on the day on which the right that is the subject of that assignment is assigned.

Division 3 - Dutiable value of property subject to put and call option or call option assignment

95.     Dutiable value of property subject to put and call option or call option assignment

Despite section 18 , the dutiable value of the dutiable property that is the subject of a put and call option or a call option assignment is the greater of the following amounts:

(a) the sum of –

(i) the consideration, or the value of the consideration, for the making of the put and call option or the consideration, or the value of the consideration, for the assignment of the right which is the subject of the call option assignment; and

(ii) the consideration, or the value of the consideration, that would be payable if the call option in the put and call option were exercised;

(b) the unencumbered value of the dutiable property.

Division 4 - No double duty

96.     No double duty

If the Commissioner is satisfied that the correct amount of duty has been paid –

(a) on the making of a put and call option; and

(b) where necessary, on the assignment of a call option under that put and call option –

no further duty is payable by a person on the exercise of the call option or put option under that put and call option.

Division 5 - Exemptions

97.     Exemptions

(1)  Despite any other provision of this Part, duty is not chargeable in respect of the making of a put and call option or a call option assignment if the Commissioner is satisfied that –

(a) the put and call option was made for the sole purpose of obtaining finance; or

(b) the put and call option was assigned to a body established solely for the purpose of raising funds in relation to an investment scheme promoted by the person who assigned the call option; or

(c) the put and call option forms part of a scheme of call options and put options granted by the proprietors of a business that –

(i) were granted for the sole purpose of facilitating the continuation of the business by one or more of the proprietors; and

(ii) are exercisable only on the occurrence of an event specified in the call options or put options that would cause a proprietor referred to in subparagraph (i) to seek to acquire the interest in the business of one or more of the other proprietors.

(2)  This section does not affect any duty payable under Chapter 2 by the transferee on a transfer of an option to purchase land in Tasmania.

(3)  In this section –

proprietor means –

(a) in the case of a business carried on by a partnership, a partner in that partnership; or

(b) in the case of a business carried on by a company within the meaning of the Corporations Act, a shareholder in the company; or

(c) in the case of a business carried on by a unit trust scheme, a holder of a unit in that scheme; or

(d) in any other case, a person the Commissioner determines to be a proprietor of the business.