Page 1495 - Week 04 - Thursday, 29 March 2012
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make the legislation explicit as to how land rent leases are to be valued when transferred. This will ensure that these leases are treated in the same manner as other crown leases and attract the appropriate duty as intended. I commend the Duties Amendment Bill 2012 to the Assembly.
Debate (on motion by Mr Smyth) adjourned to the next sitting.
Duties Amendment Bill 2012 (No 2)
Mr Barr, pursuant to notice, presented the bill, its explanatory statement and a Human Rights Act compatibility statement.
Title read by Clerk.
MR BARR (Molonglo—Deputy Chief Minister, Treasurer, Minister for Economic Development and Minister for Tourism, Sport and Recreation) (10.07): I move:
That this bill be agreed to in principle.
The Duties Amendment Bill 2012 (No 2) amends the Duties Act 1999. Under the intergovernmental agreement on the reform of commonwealth-state financial relations, the government has progressively abolished the duty payable on a number of different transactions. The duty on the transfer of non-real core business assets was abolished on 1 July 2006. The duty on the creation of short-term subleases of less than 30 years was abolished on 1 July 2009.
Ad valorem duty on transfers of subleases was retained. It was retained to stop subleases being used as a mechanism to transfer effective control and ownership of a commercial property without transferring the legal title and thereby avoiding the payment of conveyance duty. It is a common practice, when a business is sold, for an existing sublease to be transferred to the new owner. This allows the new owner to continue operating the business from the same premises under the existing terms and conditions of the lease. The value of the short-term sublease is nominal and therefore is only subject to a minimum duty of $20.
However, an anomaly exists under current legislation whereby business goods transferred with other dutiable property, such as a sublease, attract an ad valorem duty. For example, if a person transfers goods such as coffee machines, fridges or ovens in conjunction with a sublease, the sublease would attract only a $20 duty while duty would be charged on the total value of the goods transferred. If the goods were transferred separately, no duty would apply. This creates an anomalous situation.
In practice, the Commissioner for ACT Revenue has, in the past, generally exercised his discretion under the act to exclude such goods when determining a taxpayer’s duty liability. To provide certainty to taxpayers it is preferable to amend the legislation to remove this anomaly.
By abolishing duty on short-term subleases, this bill removes a small nuisance tax on the ACT business community. This will assist businesses in the ACT by reducing
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