Legislative Assembly for the ACT: 2012 Week 6 Hansard (10 May) . . Page.. 2324..
Title read by Clerk.
MR BARR (Molonglo—Deputy Chief Minister, Treasurer, Minister for Economic Development and Minister for Tourism, Sport and Recreation) (11.02): I move:
That this bill be agreed to in principle.
I present the Duties (Landholders) Amendment Bill 2012 to the Assembly. Under existing landholder arrangements in the ACT, large wholesale trusts currently bear a significant administrative burden to meet qualifying requirements of the Duties Act 1999.
These trusts often have a number of national and international investors, which adds to the reporting complexity. The current arrangements raise uncertainty for investors about their tax liability in the territory where interests held by individual investors fluctuate.
The government has become aware of data suggesting that our landholder provisions may create a disincentive for property investment in the territory. To put it more bluntly, investment may be directed to other jurisdictions where the landholder provisions are simpler or where there is some discretion in determining qualification as a wholesale unit trust.
The amendments in the bill will align landholder provisions in the ACT more closely with NSW, significantly reduce the administrative burden on trust companies, simplify compliance with the landholder provisions, and improve the ACT's attractiveness to large wholesale investors. Unit trust schemes would then be treated on an equal footing with private companies. As a result, the wholesale unit trust registration and reporting provisions would no longer be required. This will simplify reporting and regulation, and improve the ACT's investment competitiveness.
When a person acquires an interest in a landholder trust, they may be subject to landholder duty if the acquisition is a "relevant acquisition". A relevant acquisition is one that is a significant interest, either by itself or in aggregate with other interests according to the legislation. The ACT's definition of what is a significant interest in a unit trust follows the previous New South Wales land rich provisions.
A relevant acquisition occurs when a person acquires an interest in a private unit trust scheme that holds land in the ACT, and that interest would entitle the acquirer to 20 per cent or more of the property of the landholder. Under the New South Wales landholder provisions, both unit trusts and private companies are treated the same. A relevant acquisition only occurs where the person would be entitled to at least 50 per cent of the landholder property.
There is an exception in ACT legislation where a person acquires a significant interest in a unit trust scheme, and that scheme is a wholesale unit trust scheme. A wholesale unit trust scheme is one where at least 80 per cent of the units in the unit trust scheme are held by qualifying investors. Each qualifying investor must hold less than