The Revenue Laws Amendment Bill 2018 was introduced in the WA Legislative Assembly on 29 November 2018. It contains amendments to the Duties Act 2008, Land Tax Assessment Act 2002 and Pay-roll Tax Assessment Act 2002. These amendments propose to address significant duty leakage, ensure certain taxpayer exemptions and concessions apply correctly, and improve the efficiency of WA’s taxation legislation. The Bill is complemented by the Taxation Administration Amendment Bill 2018, also introduced into the Legislative Assembly on 29 November 2018, which contains amendments to improve the administrative and enforcement arrangements for the State taxes, together with consequential amendments from this Bill.
The Revenue Amendment Bill contains the following amendments:
- new linked entity and grouping provisions for landholder duty – The Bill broadens the linked entity provisions to link an entity to an unlisted entity where the first entity has a total direct or indirect interest of at least 50% in the other entity.
- New grouping provisions propose to limit the ability for acquisitions to be structured into separate transactions to defeat the landholder duty threshold or to reduce duty on an acquisition. These amendments would apply to duty on specified acquisitions or transactions;
- introduces a fixed to land model – This applies duty to direct and indirect acquisitions of things fixed to land, regardless of whether they are common law fixtures or if they are being acquired independently from the underlying land. The meaning of land would be extended to include anything fixed to land, whether or not that thing: (i) constitutes a fixture at law; or (ii) is owned separately from the land; or (iii) is notionally severed or considered to be legally separate from the land as a result of how a State or Commonwealth law operates;
- restores duty on contractual mining rights – A derivative mining right will be included as a land asset for landholder duty purposes. The value of the rights will be included when determining a landholder’s entitlement to land and in the value of the landholder when calculating duty;
- modernises the duties family farm exemption – Under the proposed amendments, the exemption will apply where:
- a farmer transfers farming property to a related discretionary trust under which the farmer is a beneficiary;
- a farmer transfers farming property to a family member and retains an interest in the entity conducting the farming business on the land;
- a farmer is not conducting a farming business immediately prior to a transfer of farming property to a family member, if the Commissioner is satisfied the farmer had previously conducted the business and a family member (or a related entity) is conducting the business immediately prior to the transfer;
- the partnership that conducts a farming business includes non-family members;
- a farmer and their spouse (transferors) and the farmer’s sibling and their spouse (transferees) are parties to a transaction or have an interest in the entity conducting the farming business; and
- if a transferee is a bare trustee, the beneficiaries hold an interest in the related entity that conducts the farming business;
- prescribing conditions for nominal duty to apply to a transfer to and from a bare trustee and transfers to facilitate a subdivision – Duty will apply to a transfer of property to a person to hold as bare trustee (original transfer). Nominal duty will apply to a transfer back to the beneficiary (subsequent transfer) if the Commissioner is satisfied that no other person held a beneficial interest in the property between the transfers (other than the trustee’s right of indemnity); and
- seeks to ensure land tax residential exemptions apply to land that is subdivided during an assessment year.
The Taxation Administration Amendment Bill 2018 (amongst other things) seeks to strengthen the Commissioner’s powers to recover unpaid tax. The changes include:
- The recovery provisions for dishonoured payments will be expanded to include electronic payments such as by BPay and BPoint.
- With the taxpayer’s consent, the Commissioner can lodge a memorial against land or mining tenements transferred to a taxpayer after payment of an interim transfer duty assessment. The memorial will remain in place until the final assessment is paid.
- The Commissioner can lodge a memorial against land or mining tenements owned by a taxpayer to secure unpaid duty that results from a reassessment of the taxpayer’s liability on the purchase of that property.