Legislative Assembly for the ACT: 2008 Week 8 Hansard (7 August) . . Page.. 3093..
MR STANHOPE (continuing):
more in a private unit trust scheme is a significant interest in the assets of the company or unit trust and should be taxed equally with other purchases of land. The proposed interests that can be acquired before landholder duty applies reflect changes in current business practices since the introduction of the original landholder provisions and will act to protect the territory's tax base.
It is important to note that the landholder provisions will not apply to companies or unit trusts that are listed either on the Australian Stock Exchange or on a member of the World Federation of Exchanges. However, landholders listed on a smaller exchange recognised under the Duties Act will be subject to landholder duty. This will stop entities listing on a smaller exchange simply to avoid duty.
Currently, a public unit trust scheme is not considered to be a landholder provided it is a managed investment scheme with 50 or more investors. The bill introduces the concept of a widely held trust, where the required minimum number of investors is 300. Twelve months have been allowed for existing unit trusts to meet this new definition. Such a trust, which does not have 300 or more investors after 12 months, will be a private unit trust and will be subject to landholder duty.
Currently, acquisitions of any interest in a landholding entity by the same purchaser or associated parties are aggregated where they occur within a three-year period. The bill strengthens the aggregation provisions to capture acquisitions by seemingly unrelated parties where there is substantially one arrangement or where purchasers act together to acquire individual interests below the threshold.
The changes will also ensure that acquisitions by linked entities are aggregated as if they were a single transaction. This will stop linked entities from being used to circumvent the ownership test. Further, an acquisition arising from the exercise of an option will be aggregated with other acquisitions during the following period: three years before the option is granted, up to when the option is exercised.
The bill adopts the New South Wales provisions for registration of wholesale unit trust schemes. Under this registration scheme, qualifying investors will be excluded from the association person provisions. For example, transactions in a wholesale unit trust involving superannuation trusts with common beneficiaries would not be aggregated.
In conclusion, the bill does not expand the territory's tax base; instead it protects the tax base by tightening the current anti-avoidance provisions. The changes ensure that significant interests in ACT land purchased by transferring ownership of the entity that owns the land will continue to be charged duty at the same rate as a direct conveyance. Again, I thank members for their contributions and for their support of this bill.
Question resolved in the affirmative.
Bill agreed to in principle.
Leave granted to dispense with the detail stage.
Bill agreed to.