State Taxation Acts Amendment Bill 2018

Introduction Print

EXPLANATORY MEMORANDUM

General

The Bill amends the Duties Act 2000 in relation to—

the aggregation of the interests of all foreign persons for the purposes of the foreign purchaser additional duty; and

foreign purchasers who jointly purchase a principal place of residence with an Australian spouse or domestic partner; and

partners' interests in partnership property; and

property vested in apparent purchasers; and

exemptions for transfers of property between spouses or domestic partners; and

the exemption for equity release programs; and

principal place of residence exemptions and concessions for first home buyers who are members of the Australian Defence Force; and

the exemption from duty payable in respect of first time purchasers of farmland by farmers under 35 years of age.

The Bill amends the Payroll Tax Act 2007 to reduce the rate for payroll tax payable by regional Victorian businesses.

The Bill amends the Unclaimed Money Act 2008 in relation to executors and administrators.

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Clause Notes

Part 1—PreliminaryPart 1 of the Bill outlines the purposes of the Bill and contains the commencement provision.

Clause 1 outlines the purposes of the Bill.

Clause 2 provides the commencement dates for the Bill.

The Act (except Division 6 and 7 of Part 2 and Part 3) comes into operation on the day after the day on which it receives Royal Assent.

Section 25, which makes a statute law revision amendment to the Land Tax Act 2005 in relation to a formula, operates retrospectively from 1 January 2018. This amendment ensures the correct formula is used to calculate land tax in relation to the absentee owner surcharge for certain subtrust structures. In cases affected by this formula, the absentee owner surcharge has been calculated in accordance with the intended operation of the formula to ensure taxpayers were not disadvantaged by the technical defect in the formula.

Division 6 of Part 2, which amends the Duties Act 2000 in relation to the principal place of residence exemptions and concessions for first home buyers who are members of the Australian Defence Force, comes into operation on 1 July 2018.

Division 7 of Part 2, which amends the Duties Act 2000 in relation to the exemption from duty payable in respect of first time purchasers of farmland by farmers under 35 years of age, comes into operation on 1 July 2018.

Part 3, which amends the Payroll Tax Act 2007 to provide for a lower rate of payroll tax to be paid by certain Victorian regional businesses in respect of taxable wages those employers pay to their employees who perform their services mainly in regional Victoria, comes into operation on 1 July 2018.

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Part 2—Amendment of Duties Act 2000Part 2 of the Bill amends the Duties Act 2000 in relation to an exemption for foreign purchasers who jointly purchase a principal place of residence with an Australian spouse or domestic partner; to provide for the aggregation of the interests of all foreign persons for the purposes of the foreign purchaser additional duty, whether they are associated or not; partners' interests in partnership property, in response to the decision in Commissioner of State Revenue v Danvest Pty Ltd & Anor [2017] VSCA 382; in relation to the apparent purchaser duty exemption; the exemption for transfers of property between spouses or domestic partners; to expand the number of "permitted providers" for the purposes of the exemption for equity release programs; to provide an exemption to first home buyers who are members of the Australian Defence Force from the residency requirement in relation to the principal place of residence exemption and concession; and to increase the exemption threshold in respect of first time purchasers of farmland by farmers under 35 years of age.

Division 1—Foreign purchasers

Clause 3 amends section 3A of the Duties Act 2000 to remove circularities in the wording of the provisions and inserts a new aggregation test for determining a controlling interest in a corporation for the purpose of the definition of foreign corporation.

Subclause (1) amends the heading in section 3A of the Duties Act 2000 by substituting "in a foreign corporation" with "for the purposes of the definition of foreign corporation" to more accurately reflect the purpose of the provision.

Subclauses (2) and (4) make minor amendments to sections 3A(1) and 3A(3) respectively to remove circularities in the wording of the provisions. The purpose of section 3A is to determine if a corporation is a foreign corporation because a foreign natural person, foreign corporation or trustee of a foreign trust has a controlling interest in the corporation. The provisions had been expressed as a controlling interest in "the foreign corporation", rather than in "a corporation". The amendments rectify this circularity in the existing provision.

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Subclause (3) amends section 3A(2) by introducing a new aggregation test for determining if a foreign natural person, foreign corporation or trustee of a foreign trust has a controlling interest in a corporation. The new test provides that when determining whether the foreign natural person, foreign corporation or trustee of a foreign trust has a controlling interest in a corporation, all interests held by any other foreign natural person, foreign corporation or trustee of a foreign trust (whether an associated person or not) are to be aggregated.

As a result of this new test, where foreign natural persons, foreign corporations and trustees of foreign trusts collectively control the majority voting power or issued shares in a corporation, then that corporation will be taken to be a foreign corporation.

Example

A corporation has 2 equal shareholders. Both shareholders are foreign natural persons but not associated with each other. Prior to this new test the corporation would not be a foreign corporation, despite the corporation being wholly owned and controlled by foreign natural persons. This is because the Duties Act 2000 did not allow for aggregation between persons who were not associated persons and neither shareholder on their own held a controlling interest (i.e. more than 50%). Under the new test, aggregation will now occur between all foreign natural persons, foreign corporations or trustees of foreign trusts whether or not they are associated persons.

This new test is set out in new section 3A(2)(b)(ii). New section 3A(2)(b)(i) simply restates the existing test. The 2 tests are mutually exclusive.

Clause 4 amends section 3B of the Duties Act 2000 to remove circularities and inserts a new aggregation test for determining a substantial interest in a trust estate for the purpose of the definition of foreign trust.

Subclause (1) amends the heading in section 3B of the Duties Act 2000 by inserting after the words "trust estate" the words "for the purposes of the definition of foreign trust" to more accurately reflect the purpose of the provision.

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Subclauses (2) and (3) make minor amendments to sections 3B(1) and 3B(2) respectively to remove circularities in the wording of the provisions. The purpose of section 3B is to determine if a trust is a foreign trust because a foreign natural person, foreign corporation or trustee of a foreign trust has a substantial interest in the estate of the trust. The provisions had been expressed by reference to "foreign trust", rather than "trust". The amendments rectify this circularity in the existing provision.

Subclause (4) amends section 3B(3) by introducing a new aggregation test for determining if a foreign natural person, foreign corporation or trustee of a foreign trust has a substantial interest in the trust estate of a trust. The new test provides that when determining whether the foreign natural person, foreign corporation or trustee of a foreign trust has a substantial interest in the trust estate, all interests held by any other foreign natural person, foreign corporation or trustee of a foreign trust (whether an associated person or not) are to be aggregated.

As a result of this new test, where foreign natural persons, foreign corporations and trustees of a foreign trust collectively have a beneficial interest of more than 50% of the capital of the estate of the trust then the trust will be a foreign trust.

Example

A trust has 2 beneficiaries each entitled equally to the capital of the estate of the trust. Both beneficiaries are foreign natural persons but not associated with each other. Prior to this new test the trust would not be a foreign trust, despite foreign natural persons being beneficially entitled to 100% of the capital of the estate of the trust. This is because the Duties Act 2000 did not allow for aggregation between persons who were not associated persons and neither beneficiary on their own held a substantial interest (i.e. more than 50%). Under the new test, aggregation will now occur between all foreign natural persons, foreign corporations or trustees of foreign trusts whether or not they are associated persons.

This new test is set out in new section 3A(3)(b)(ii). New section 3A(3)(b)(i) simply restates the existing test. The 2 tests are mutually exclusive.

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Clause 5 inserts a new Division 8 in Part 5 of Chapter 2 of the Duties Act 2000 relating to an exemption from additional duty for foreign purchasers.

New section 69AJ introduces an exemption from foreign purchaser additional duty (FPAD) for foreign purchasers who jointly purchase a principal place of residence with an Australian spouse or domestic partner.

A foreign purchaser will be entitled to an exemption from FPAD if—

the foreign purchaser is a foreign natural person who is the spouse or domestic partner of a natural person who is not a foreign natural person; and

the land-related interest in residential property is transferred jointly to the foreign purchaser and their spouse or domestic partner; and

the foreign purchaser meets a residency requirement, that is, they occupy the residential property as their principal place of residence for a continuous period of 12 months commencing within 12 months immediately after they become entitled to possession of the property.

Unlike similar residence requirement provisions in other parts of the Duties Act 2000 involving multiple purchasers, where at least one purchaser must satisfy the residence requirement (for example, section 43A or 57K), new section 69AJ(c) specifically requires that the foreign purchaser must meet the residence requirement.

New section 69AK provides that if there are good reasons for doing so, the Commissioner of State Revenue may vary the residence requirement to—

reduce the required period of residence; or

determine that a temporary absence from residence does not break the continuity of residence; or

extend the period in which residency must begin.

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New section 69AK(2) provides that if the Commissioner determines that a temporary absence from residence does not break the continuity of residence, the foreign purchaser who received an exemption under the new section 69AJ is not entitled to an exemption under that section in respect of any other dutiable transaction of a kind referred to in that section during the period of temporary absence, unless the foreign purchaser pays FPAD on the original dutiable transaction.

New section 69AK(3) provides for the situation where a foreign purchaser who has an exemption under section 69AJ or who is subject to a determination under new subsection (1) dies. In this situation, new section 69AK(3) provides that the requirement under section 69AJ(c) is taken to have been complied with.

New section 69AL provides that the Commissioner of State Revenue may reassess the duty payable by the foreign purchaser on the relevant PPR transfer in accordance with section 28A where the foreign purchaser has not complied with the residence requirement prescribed in the new section 69AJ(c).

New section 69AL(4) provides that if the period of residence required for an exemption is not complied with, the foreign purchaser is not entitled to an exemption under the new section 69AJ in respect of any other dutiable transaction of a kind referred to in that section until the foreign purchaser has paid the FPAD for which they are liable because of new section 69AL.

New section 69AM(1) requires foreign purchasers who have received the exemption under section 69AJ to notify the Commissioner of State Revenue in writing, and within 30 days of becoming aware, of any circumstances that may result in a failure to comply with the residence requirement in section 69AJ(c).

New section 69AM(2) provides that a failure to make such a notification does not affect the Commissioner's power to reassess duty under the new section 69AL or exercise a discretion under the new section 69AK.

Clause 6 makes a minor technical amendment to section 70(2) of the Duties Act 2000 by changing the expression "a relevant acquisition" to "an acquisition".

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Clause 7 amends section 89B of the Duties Act 2000 to restrict the duty concession set out in the section from applying to the calculation of FPAD payable (if any) for the conversion of a private unit trust scheme to a public unit trust scheme.

Subclause (1) amends section 89B(4)(b) so that the section now only provides a charging provision, with the provision concerning how duty is to be charged set out in new section 89B(4A) and (4B).

Subclause (2) inserts new section 89B(4A) and (4B). Section 89B(4A) sets out how the concession from duty is to be calculated. This was previously part of section 89B(4)(b). Section 89B(4B) restricts the concession from apply to FPAD by providing that the concession in section 89B(4A) does not apply when determining the duty chargeable at the rate set out in section 28A.

Clause 8 amends section 89C of the Duties Act 2000 to restrict the duty concession set out in the section from applying to the calculation of FPAD payable (if any) for the conversion of a private company to a listed company.

Subclause (1) amends section 89C(4)(b) so that the section now only provides a charging provision, with the provision concerning how duty is to be charged set out in new section 89C(4A) and (4B).

Subclause (2) inserts new section 89C(4A) and (4B). Section 89B(4A) sets out how the concession from duty is to be calculated. This was previously part of section 89C(4)(b). Section 89C(4B) restricts the concession from applying to FPAD by providing the concession in section 89B(4A) does not apply when determining the duty chargeable at the rate set out in section 28A.

Division 2—Partnerships

Clause 9 inserts section 3H into the Duties Act 2000.

New section 3H introduces partnership provisions that address the Victorian Court of Appeal decision in Commissioner of State Revenue v Danvest Pty Ltd & Anor [2017] VSCA 382. Danvest has impacted how the Duties Act 2000 applies in a number of scenarios. While some partnership transactions (involving a custodian holding partnership assets) may not be

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liable to duty following Danvest, other partnership transactions continue to remain liable, such as where the transaction is accompanied by a transfer of legal title to land. Further, for some partnership transactions, liability following Danvest may be higher and not reflect commercial reality. Accordingly, Danvest has resulted in inconsistent outcomes for what are in substance the same arrangements. Danvest has also impacted the application of the corporate reconstruction exemption in Part 2 of Chapter 11, such that a corporate group with a partnership in its structure may not be able to obtain the corporate reconstruction exemption because it is unable to establish the necessary beneficial ownership link between its members. New section 3H is designed to address these issues. To remove any doubt about tracing property through partnerships in a landholder duty context, the provisions also clarify how the linked entity provisions in Part 2 of Chapter 3 apply to a partnership.

New section 3H(1) provides that for the purpose of the Duties Act 2000, a partner in a partnership is taken to have beneficial ownership of each item of partnership property in the same proportion as the partner's partnership interest.

A partnership interest is defined in section 3H(5) to mean the proportion of any surplus to which the partner would be entitled in respect of capital if the partnership were to be dissolved.

The definition of partnership interest is not concerned with what property will be received by the partner at the relevant time.  Rather, the definition is directed to the proportion of property that would be received by the partner if the partnership was dissolved and there was partnership property to distribute. In this sense, it is a notional exercise that looks to determine proportional entitlement, with the value of that entitlement a different exercise.

New section 3H(2) provides that the value of the partner's beneficial ownership of an item of partnership property is determined without regard to any liabilities of the partnership.

To explain how the provisions apply, an example has been inserted immediately following section 3H(2). The example shows that, as a result of section 3H where a person acquires a partnership interest in a partnership that holds land that is dutiable property, a dutiable transaction under Chapter 2 of the Duties Act 2000 will be triggered.

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Section 3H(3) has been inserted for the avoidance of doubt. It provides that for the purpose of section 75, partnership property is taken to be held by the partnership for the benefit of each partner in the same proportion as the partner's beneficial ownership referred to in subsection (1).

Example

A purchaser acquires all the shares in the head company of a corporate group one of the subsidiaries of which owns land in Victoria worth $100 million. All shares in the land owning subsidiary are owned by a custodian who holds the shares for the benefit of a partnership. The partnership comprises partners all of whom are corporations wholly owned by the head company.

For the purposes of the Duties Act 2000 a person is defined to include a partnership. The amendment clarifies (to avoid doubt) that the partnership holds the partnership property (comprising the shares in the subsidiary legally owned by the custodian) for the benefit of the partners and therefore the partnership and the partners are linked entities of the head company for the purposes of section 75 of the Duties Act 2000. Accordingly, on a notional winding up or dissolution of all the linked entities in the corporate group, including the partnership, the head company will be deemed for landholder duty purposes to hold $100m of land in Victoria.

Section 3H(4) has been inserted for the purpose of Part 2 of Chapter 11. While section 3H(1) overcomes issues with the beneficial ownership link between members of a corporate group that include a partnership, section 3H(4) clarifies (to avoid doubt) that the partners will also be able to meet the voting limb for establishing a parent corporation and subsidiary within the meaning of section 250 of the Duties Act 2000.

Division 3—Property vested in apparent purchasers

Clause 10 inserts new sections 34(1A) and (1B) into the Duties Act 2000 and repeals section 34(2A).

Section 34(1) of the Duties Act 2000 provides exemptions for arrangements involving a purchase money resulting trust. While the law on purchase money resulting trusts will recognise a proportional entitlement to property (e.g. a 50% purchase price contribution can result in a 50% entitlement to the property), case

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law on the exemption in section 34 has found that the exemption cannot apply on an apportionment basis. For example, if a 100% transfer represents a 50% beneficial entitlement under a resulting trust, with the other 50% being transferred as part of a new purchase (e.g. a buy out of the other 50% interest not beneficially held) section 34 has been held not to apply at all to the transfer. This means the transferee will pay full duty on the transfer, including full duty on the 50% beneficial interest already held by the transferee.

New section 34(1A) now provides for an exemption from duty on an apportionment basis. The requirements to receive the apportioned exemption under the new section 34(1A) are the same as the requirements under section 34(1) in determining whether the property is held on trust for the real purchaser (i.e. held by the apparent purchaser on trust for the real purchaser in respect of the relevant proportion of the property). Accordingly, it will be necessary to demonstrate that all purchase monies were provided by the real purchaser for the relevant proportion of the property to be exempted and to demonstrate that it was always intended for the real purchaser to be the owner of that property and that therefore a resulting trust has arisen.

New section 34(1A) provides that in addition to section 34(1), no duty is chargeable if a declaration of trust is made by an apparent purchaser in respect of identified dutiable property and—

a real purchaser has provided less than 100% of the money for the purchase of the dutiable property—to the extent that the declaration of trust vested in the apparent purchaser on trust for the real purchaser the dutiable property in proportion to the real purchaser's contribution; or

the Commissioner is satisfied that a real purchaser has provided or will provide less than 100% of the money for the purchase of the dutiable property—to the extent that the declaration of trust will vest in the apparent purchaser on trust for the real purchaser the dutiable property in proportion to the real purchaser's contribution.

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New section 34(1A)(b) provides that that in addition to section 34(1), no duty is chargeable if there is a transfer of dutiable property from an apparent purchaser to a real purchaser and the real purchaser has provided less than 100% of the money for the purchase of the dutiable property—to the extent that the dutiable property is vested in the apparent purchaser on trust in proportion to the real purchaser's contribution.

An example has been inserted to clarify the operation of the new provision. The example shows how an apportioned exemption applies where all relevant features of a purchase money resulting trust are present and one of the parties has contributed to the initial purchase of the property in circumstances when it was understood the party was to be the owner of a 50% share of the property.

New section 34(1B) replaces section 34(2A), which has been repealed.

Section 34(1B) provides the Commissioner with a discretion to treat monies provided by a person other than the real purchaser as being provided by the real purchaser for the purpose of sections 34(1) and 34(1A). In exercising the discretion, the Commissioner must be satisfied that the monies were provided as a loan that has been, or will be, repaid by the real purchaser.

Section 34(1B) applies in instances where parties take out a joint mortgage to fund the purchase of property, but only one of the parties makes (and the parties always intended only that person would make) all repayments under the mortgage.

This provision allows the Commissioner to accept the person who made the repayments as having contributed the full mortgage liability to the purchase price of the property. The provision works by considering a purchase price contribution from a mortgagee (i.e. the person legally liable under the mortgage) to be a loan from the mortgagee to the real purchaser and therefore a purchase price contribution from the real purchaser.

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Division 4—Exemptions for transfers between spouses or domestic partners

Clause 11 inserts a new section 43AA into the Duties Act 2000 to provide that, where a transferee gives a mortgage to secure an amount the same or a greater amount as that outstanding under the mortgage immediately before the transfer, or assumes the liabilities under the mortgage, the Commissioner will not include that amount or value as consideration for the purposes of the exemption under section 43 if satisfied that the giving of the mortgage or assumption of the liability is not part of a sale or other arrangement designed to take advantage of the exemption.

This ensures that the existence of a mortgage is not an impediment to the application of the exemption under section 43.

New subsection (2) provides what elements are taken to satisfy the Commissioner that the giving of the mortgage or assumption of the liability is not part of a sale or other arrangement designed to take advantage of the exemption, which include—

if the mortgage was created at or before the time of the transfer; or

if the mortgage was part of a genuine re-financing of a mortgage created at or before the time of the transfer; or

where any new borrowings have been applied to the improvement of the property that is the subject of the transfer.

Division 5—Equity release programs

Clause 12 amends section 55 of the Duties Act 2000 by replacing the "financial institution" requirement in the section with a new concept of "permitted provider". The effect of this amendment is to extend the persons who can be the provider of the equity release programs for the purposes of the section to a body regulated by the Australian Prudential Regulation Authority (APRA).

Subclause (1) substitutes the term "financial institution" in section 55(1)(a) (wherever occurring) with "permitted provider".

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Subclause (2) inserts a definition of permitted provider in section 55(4), repeals the definition of financial institution and replaces the term "financial institution" in the definition of equity release program (wherever occurring) with "permitted provider".

The definition of permitted provider includes a body regulated by APRA within the meaning of section 3(2) of the Australian Prudential Regulation Authority Act 1998 of the Commonwealth. The other 4 limbs of the definition are bodies that were already within the previous definition of financial institution.

Division 6—Principal place of residence exemption or concession for first home buyers

Clause 13 inserts new sections 57K(4) and (5) into the Duties Act 2000.

Section 57K imposes a residence requirement on a transferee (or transferees) of a principal place of residence (PPR) who has benefitted from either the PPR concessional rate of duty (section 57J), an exemption or concession from duty as a first home buyer purchasing a PPR (section 57JA), or an adjustment of consideration for the purposes of the off-the-plan concession (section 21(3) or (4) or 32V(3) or (4)).

New section 57K(4) provides an exemption for certain members of the Australian Defence Force (ADF) from compliance with the residence requirement for the purposes of the first home buyer principal place of residence exemption or concession. To be eligible for the exemption, the ADF member must be buying their first home and must also be registered on the electoral roll to vote in Victoria. In cases involving more than one transferee, the new section 57K(4)(b) requires that at least one of the transferees is a member of the ADF and each of the transferees is enrolled to vote in Victoria.

New section 57K(5) defines the phrase member of the Defence Force to mean a member of the Permanent Forces within the meaning of the Defence Act 1903 of the Commonwealth. The register of electors has the same meaning as in the Electoral Act 2002.

These changes are designed to allow ADF members to fulfil their service obligations without adversely impacting on their exemption or concession eligibility under the Duties Act 2000.

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Division 7—Young farmers

Clause 14 amends section 69AD(1)(d)(ii) of the Duties Act 2000 to substitute $600 000 for $300 000. This gives effect to the increase in the duty exemption threshold for young farmers.

Clause 15 amends section 69AE of the Duties Act 2000.

Subclause (1) amends section 69AE(2) to omit the words "$300 000 of" in order to give effect to the increase in the duty exemption threshold.

Subclause (2) repeals Example 2 at the foot of section 69AE(2), which, as a result of the increase in the duty exemption threshold, is unnecessary as Example 1 already sets out the operation of the exemption.

Subclause (3) amends section 69AE(3) to replace the current provision to give effect to the increase in the duty exemption threshold and to clarify the amount of duty concession available to young farmers. The new formula calculates the concessional amount of duty payable by a young farmer or a young farmer business entity where the dutiable value of the dutiable property exceeds $600 000 but does not exceed $750 000. The formula provides a greater concession the closer the dutiable value of the dutiable property is to $600 000 with the impact of the concession progressively reducing as the dutiable value of the dutiable property approaches $750 000.

These changes align the benefits available to an eligible young farmer purchasing their first farmland property with the first home buyer duty exemption or concession.

Clause 16 amends section 69AF of the Duties Act 2000.

Subclause (1) amends section 69AF(1)(b) to substitute $600 000 for $300 000. This is to give effect to the increase in the duty exemption threshold for young farmers.

Subclause (2) amends the Example at the foot of section 69AF(2) to reflect the increase in the duty exemption threshold.

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Division 8—Other amendments

Clause 17 amends section 21(2) of the Duties Act 2000 to substitute "transfer of dutiable property" for "PPR transfer". This amendment clarifies that the off-the-plan concession in section 21(3) and refurbishment concession in section 21(4) are only applicable for the purposes of calculating duty in respect of the principal place of residence exemption or concession or the first home buyer exemption or concession. These concessions do not apply to other purchases, such as purchases of investment properties.

Clause 18 amends section 32V of the Duties Act 2000.

Subclause (1) amends section 32V(2A) to substitute "relevant transaction of a type specified in subsection (2B)" for "transaction under this Part". This amendment confirms that the off-the-plan concession in section 21(3) and refurbishment concession in section 21(4) are only applicable for the purposes of calculating duty in respect of sub-sale transactions where the principal place of residence exemption or concession or the first home buyer exemption or concession is applicable. These concessions do not apply to other sub-sale transactions of other properties, such as investment properties.

Subclause (2) repeals section 32V(2B) as it is no longer necessary due to the amendment in section 32V(2A) which clarifies the application of section 21(2) in a sub-sale context

Division 9—Transitional arrangements

Clause 19 inserts new clauses 43 and 44 into Schedule 2 to the Duties Act 2000.

New clause 43 provides transitional arrangements for the amendments made by this Bill to sections 89B and 89C with respect to the calculation of foreign purchaser additional duty. The effect of clause 43 is that the amendments will not apply to the conversion of the landholder if the conversion was the result of an agreement or arrangement entered into before the commencement of the amendments.

New clause 44 provides transitional arrangements for the amendments made by this Bill to sections 3A and 3B. For Chapter 2 purposes, the effect of clause 44 is that the

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amendments will not apply if a transferee committed to a transfer by entering into an agreement or arrangement prior to the amendments commencing. Similarly for the purpose of the landholder provisions in Part 2 of Chapter 3, the amendments will not apply to the acquisition of an interest in a landholder if the acquirer committed to the acquisition under an agreement or arrangement entered into prior to the amendments commencing.

Part 3—Amendment of Payroll Tax Act 2007Part 3 of the Bill amends the Payroll Tax Act 2007 to provide a reduced rate of payroll tax of 2·425% for regional Victorian businesses with effect from 1 July 2018 and amend the formulae for the calculation of payroll tax to reflect the new rate of tax.

Clause 20 amends section 86(6) of the Payroll Tax Act 2007 so the weekly payroll tax threshold amounts for the financial year commencing on 1 July 2018 and each subsequent financial year are consistent with the annual and monthly thresholds in Schedule 1 and 2 to the Act.

Clause 21 amends clause 1 of Schedule 1 to the Payroll Tax Act 2007 to insert a new paragraph (f) in the definition of R so that R refers to the new tax rate of 2·425% in the case of a regional employer and 4·85% for any other employers for the financial year commencing from 1 July 2018 and subsequent financial years.

Subclause (2) amends clause 7 of Schedule 1 to the Payroll Tax Act 2007 so that the formulae in the Schedule incorporate the new tax rate of 2·425% for regional employers.

Clause 22 amends clause 2 of Schedule 2 to the Payroll Tax Act 2007 to insert a new paragraph (f) to state the following rates of payroll tax for wages paid or payable on or after 1 July 2018—

2·425% in the case of a regional employer; and

4·85% in any other case.

Part 4—Amendment of Unclaimed Money Act 2008Part 4 of the Bill amends the Unclaimed Money Act 2008 to recognise executors and administrators of deceased estates representing the owners of unclaimed money under the Unclaimed Money Act 2008, where a grant of probate or letters of administration have been sealed or re-sealed by a Supreme Court of any Australian jurisdiction.

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Clause 23 Subclause (1) substitutes "the person's executor, administrator or assignee; or" for "the person's executors, administrators or assignees; or" in paragraph (a) in the definition of owner in section 3(1).

Subclause (2) inserts a new subsection 3(6A) to provide further detail about a reference to the person's executor or administrator for the purposes of paragraph (a) of the definition of owner in section 3(1).

The effect of the amendments is to enable an executor or administrator to make a valid claim on behalf of a deceased estate where a grant of probate or letters of administration have been granted, sealed or resealed by a Supreme Court of any Australian State or Territory.

Clause 24 Part 8 of the Unclaimed Money Act 2008 covers unclaimed superannuation benefits, and section 90 contains definitions that apply to that Part. Subclause (1) substitutes the person's executor, administrator or assignee; or" for "the person's executors, administrators or assignees; or" in paragraph (a) in the definition of owner in section 90.

Subclause (2) inserts a new subsection 90(2) to provide further detail about a reference to the person's executor or administrator for the purposes of paragraph (a) of the definition of owner in section 90.

The effect of the amendments is to enable an executor or administrator to make a valid claim on behalf of a deceased estate where a grant of probate or letters of administration have been granted, sealed or resealed by a Supreme Court of any Australian State or Territory.

Part 5—Statute law revision

Clause 25 makes a statute law revision amendment by substituting the first part of the formula in section 46ID(5)(a) of the Land Tax Act 2005 from "A = B +" with "(A × B) +". This correction is necessary to ensure the formula operates correctly and is taken to have come into operation on 1 January 2018 so that it applies from the 2018 tax year as intended.

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Clause 26 makes a statute law revision amendment by substituting the word "became" for "become" in section 3(1) in the definition of unclaimed money.

Part 6—Repeal of amending Act

Clause 27 repeals the Act as on 1 July 2019. The repeal does not affect the continuing operation of the amendments made by the Act (see section 15(1) of the Interpretation of Legislation Act 1984).

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