Victorian Numbered Acts Victorian Numbered ActsAfter Division 6 of Part 5 of Chapter 2 of the Duties Act 2000 insert —
In this Division—
"capital beneficiary "of a discretionary trust means a person, or a member of a class of person, in whom, by the terms of the trust, the whole or any part of the capital of the trust estate may be vested or remain vested—
(a) in the event of the exercise of a power or discretion in favour of the person (whether or not that power is presently exercisable); or
(b) in the event that a discretion conferred under the trust is not exercised;
disqualifying interest has the meaning given by section 69AB;
"farmland" means land used, or intended to be used, primarily for the business of primary production;
"fixed trust" means a trust under which the identity of the beneficiaries and
the quantum of their interests are ascertained;
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"primary production requirement" means the requirement referred to in section 69AC;
"young farmer" means a natural person who is carrying on, or intends to carry on, a business of primary production in relation to the dutiable property to which section 69AD applies;
"young farmer business" entity means—
(a) a trustee for a young farmer; or
(b) a company (not acting in the capacity of a trustee under a trust) all the shares in which are owned by a young farmer, or the young farmer and the young farmer's partner; or
(c) a trustee under a discretionary trust, the capital beneficiaries of which are limited to a young farmer, or the young farmer and the young farmer's partner; or
(d) a trustee under a fixed trust, the beneficiaries of which are limited to a young farmer, or the young farmer and the young farmer's partner.
For the purposes of this Division, "disqualifying interest" means—
(a) in respect of a young farmer or the young farmer's partner—
(i) an estate in fee simple in farmland held or previously held by the young farmer or the young farmer's partner; or
(A) currently held by the young farmer or the young farmer's partner, if the company holds or has previously held an estate in fee simple in farmland; or
(B) previously held by the young farmer or the young farmer's partner, if those shares were held at the same time that the company held an estate in fee simple in farmland; or
(iii) if the young farmer or the young farmer's partner—
(A) is a beneficiary of a fixed trust and the trust property includes or has previously included an estate in fee simple in farmland; or
(B) was previously a beneficiary of a fixed trust and, while the young farmer or the young farmer's partner was a beneficiary, the trust property included an estate in fee simple in farmland; or
(iv) if the
young farmer or the young farmer's partner—
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(A) is a capital beneficiary of a discretionary trust and the trust property includes or has previously included an estate in fee simple in farmland; or
(B) was previously a capital beneficiary of a discretionary trust and, while the young farmer or young farmer's partner was a capital beneficiary, the trust property included an estate in fee simple in farmland;
(b) in respect of a young farmer business entity that is—
(i) a trustee for a young farmer—if the trustee holds or has previously held an estate in fee simple in farmland on trust for that young farmer; or
(ii) a company (not acting in the capacity of a trustee under a trust)—if the company holds or has previously held an estate in fee simple in farmland; or
(iii) a trustee under a discretionary trust—if the trustee holds or has previously held an estate in fee simple in farmland on trust for that discretionary trust; or
(iv) a trustee under a fixed trust—if the trustee holds or has previously held an estate in fee simple in farmland on trust for that fixed trust.
The concession and exemption under this Division are subject to the following requirements—
(a) if the transferee of the dutiable property is a young farmer—within 5 years from the date the young farmer entered the contract for the transfer of the farmland, the young farmer must be normally engaged in a substantially full-time capacity in the business of primary production of the type carried on on the farmland; or
(b) if the transferee of the dutiable property is a trustee for a young farmer—within 5 years from the date the trustee entered the contract for the transfer of the farmland, the young farmer in respect of that trust must normally be engaged in a substantially full-time capacity in the business of primary production of the type carried on on the farmland; or
(c) if the transferee is a company (not acting in the capacity of a trustee under a trust)—within 5 years from the date the company entered the contract for the transfer of the farmland, the principal business of the company must be primary production of the type carried on on the farmland; or
(d) if the transferee is a trustee of a discretionary trust, within 5 years from the date the trustee entered the contract for the transfer of the farmland—
(i) the sole business of the trust must be primary production of the type carried on on the farmland; and
(ii) the young farmer in respect of that trust must be normally engaged in a substantially full-time capacity in the business of primary production of the type carried on on the farmland; or
(e) if the transferee is a trustee under a fixed trust, within 5 years from the date the trustee entered the contract for the transfer of the farmland—
(i) the sole business of the trust must be primary production of the type carried on on the farmland; and
(ii) the young farmer in respect of that trust must be normally engaged in a substantially full-time capacity in the business of primary production of the type carried on on the farmland.
(1) A transferee who is a young farmer or a young farmer business entity is entitled to an exemption or concession from duty under this Chapter in respect of one or more transfers of dutiable property, if—
(a) the dutiable property the subject of each transfer is an estate in fee simple in farmland; and
(b) at the time that the contract or contracts for the transfer or transfers of the dutiable property is or are entered into—
(i) if the transferee is a young farmer—the young farmer is under the age of 35; or
(ii) if the transferee is a young farmer business entity—the young farmer in respect of that entity is under the age of 35; and
(c) the transferee is—
(i) a young farmer—
(A) who does not have a disqualifying interest; and
(B) whose partner does not have a disqualifying interest; or
(ii) a young farmer business entity—
(A) that does not have a disqualifying interest; and
(B) where the young farmer or the young farmer's partner in respect of that young farmer business entity does not have a disqualifying interest; and
(d) the dutiable value of the dutiable property—
(i) in the case of one transfer of dutiable property—does not exceed $400 000; or
(ii) in the case of two or more transfers of dutiable property—for one of those transfers, does not exceed $300 000; and
(e) the transferee is a young farmer or young farmer business entity who meets the primary production requirement in relation to the dutiable property.
(2) An exemption or concession from duty under subsection (1) will apply in respect of two or more transfers of dutiable property only if those transfers arise from—
(a) a single contract of sale; or
(b) two or more contracts of sale entered into at the same time.
(1) For the purposes of section 69AD, in the case of one transfer of dutiable property—
(a) if the dutiable value of the dutiable property does not exceed $300 000, the young farmer or young farmer business entity (as the case requires) is entitled to an exemption from duty on the dutiable transaction;
(b) if the dutiable value of the dutiable property exceeds $300 000 but does not exceed $400 000, the young farmer or young farmer business entity (as the case requires) is entitled to a concession from duty on the dutiable transaction.
(2) The concession under subsection (1)(b) is an amount calculated in accordance with the following formula—
where "P" is the dutiable value of the dutiable property.
(1) For the purposes of section 69AD, in the case of two or more transfers of dutiable property—
(a) the exemption from duty on the dutiable transactions is calculated as if section 24 applies to aggregate the dutiable transactions (whether or not section 24 applies to aggregate the dutiable transactions); and
(b) the young farmer or young farmer business entity (as the case requires) is entitled to an exemption from duty in respect of $300 000 of the aggregated dutiable value of the dutiable transactions; and
(c) once paragraph (b) has applied, the duty payable on the dutiable transactions is calculated—
(i) in accordance with section 24; and
(ii) as if the dutiable values of the dutiable transactions do not include any amount in respect of which an exemption has been applied under paragraph (b).
(2) The exemption from duty under subsection (1)(c) is applied against the dutiable values of the dutiable transactions in the order of ascending dutiable values of the dutiable transactions.
Example
A young farmer enters into 3 dutiable transactions with dutiable values of $200 000 (Transaction A), $300 000 (Transaction B) and $500 000 (Transaction C). An exemption in respect of $300 000 of the aggregated dutiable value of the dutiable transactions is first applied to the dutiable transaction with the lowest dutiable value, and then to the dutiable transaction with the next lowest dutiable value. This means that a full exemption from duty applies to Transaction A and a partial exemption applies to Transaction B, being an exemption in respect of $100 000 of the dutiable value of Transaction B. For the purposes of assessing the young farmer's duty liability under subsection (1)(c), Transaction B is taken to have a dutiable value of $200 000.
(1) This section applies to a young farmer who, but for this section, in respect of a transfer of an estate in fee simple in farmland, would be entitled—
(a) to an exemption or concession from duty under section 69AD; and
(b) to a concession from duty under section 57J.
(2) The young farmer, by notice in writing to the Commissioner, must elect to receive—
(a) the exemption or concession under section 69AD; or
(b) the concession from duty under section 57J.
(3) If the young farmer elects to receive a concession under section 57J, or does not make an election under this section, he or she is not entitled to the exemption under section 69AD in respect of the transfer.
(1) If a young farmer or young farmer business entity has received an exemption or concession from duty under this Division and the primary production requirement is not complied with—
(a) the transfer is chargeable with duty at the rate set out in section 28(1) as if section 69AD does not apply, subject to any exemption or concession other than in this Division; and
(b) the Commissioner may reassess duty on the transfer accordingly (giving an allowance for any duty already paid on the transfer).
(2) A liability for duty imposed because of subsection (1) on a transfer arises when the primary production requirement for that transfer is not complied with.
Note
Section 16 provides that a tax default does not occur if the duty is paid within 3 months after the liability for the duty arises.
(3) A reassessment referred to in subsection (1)(b) is authorised if more than 5 years have passed since the initial assessment was made.
Note
Section 9(3)(c) of the Taxation Administration Act 1997 allows a reassessment to be made more than 5 years after the initial assessment if this is authorised by a taxation law.
(1) A young farmer or a young farmer business entity who has received an exemption or concession under this Division must lodge a written notice with the Commissioner within 30 days of becoming aware of any circumstances that may result in the primary production requirement not being complied with.
(2) A failure of a young farmer or young farmer business entity to comply with subsection (1) does not affect the Commissioner's power to reassess duty under section 69AH.".