Queensland: Duties Act 2001 (Qld)

Duties Act 2001 An Act about creating and imposing duties Chapter 1 Introduction Part 1 Preliminary 1 Short title This Act may be cited as the Duties Act 2001. 2 Commencement (1) This Act, other than sections 306(2), 342(2) and 497, commences on a day to be fixed by proclamation. (2) Sections 306(2), 342(2) and 497 commence on the later of the following— (a) a day to be fixed by proclamation; (b) when an arrangement is made under the Commonwealth Places (Mirror Taxes) Act 1998 (Cwlth), section 9, for Queensland. Part 2 Interpretation 3 Definitions (1) The dictionary in schedule 6 defines particular words used in this Act. (2) The definition spouse in schedule 6 applies despite the Acts Interpretation Act 1954, section 32DA(6). 4 [Repealed] 5 Relationship of Act with Administration Act (1) This Act does not contain all the provisions about duties. (2) The Administration Act contains provisions dealing with, among other things, the following— (a) assessments of duty; (b) collection and refunds of duty; (c) imposition of interest and penalty tax; (d) objections and appeals against, or reviews of, assessments of duty; (e) record keeping obligations of taxpayers; (f) investigative powers, offences, legal proceedings and evidentiary matters; (g) service of documents; (h) registration of charitable institutions. Note— Under the Administration Act, section 3, that Act and this Act must be read together as if they together formed a single Act. Part 3 Application of Act 6 Act binds all persons (1) This Act binds all persons, including the State and, as far as the legislative power of the Parliament permits, the Commonwealth and the other States. Note— However, under section 426, the State is exempt from duty unless this Act expressly provides otherwise. (2) Nothing in this Act makes the State liable to be prosecuted for an offence. 7 Extra-territorial application This Act applies to impose duty on instruments and transactions regardless of whether they are entered into or made in or outside Queensland. Note— This is because instruments and transactions on which duty is imposed have a nexus to Queensland. 7A Declaration of excluded matter for Corporations Act An interest of a person in a registered managed investment scheme is declared to be an excluded matter for the Corporations Act, section 5F, in relation to section 1070A(1)(a), (3) and (4) of that Act. Chapter 2 Transfer duty Part 1 Preliminary 8 Imposition of transfer duty (1) This chapter imposes duty (transfer duty) on dutiable transactions. Notes— 1 Concessions and exemptions for transfer duty are dealt with in parts 8A to 13. Also, other exemptions are dealt with in chapter 10. 2 Additional foreign acquirer duty is imposed on particular dutiable transactions under chapter 4. (2) Transfer duty is imposed on the dutiable value of a dutiable transaction. Part 2 Some basic concepts for transfer duty 9 What is a dutiable transaction (1) Each of the following is a dutiable transaction— (a) a transfer of dutiable property; (b) an agreement for the transfer of dutiable property, whether conditional or not; (c) a surrender of dutiable property that is land in Queensland or a transferable site area; (d) a vesting of dutiable property— (i) by, or expressly authorised by, statute law of this or another jurisdiction, whether inside or outside Australia; or (ii) by a court order, of this or another jurisdiction, whether inside or outside Australia; (e) a foreclosure of a mortgage over dutiable property; (f) an acquisition of a new right on its creation, grant or issue; (g) a partnership acquisition; Note— See chapter 2, part 7 (Dutiable transactions relating to partnerships). (h) the creation or termination of a trust of dutiable property; Note— See chapter 2, part 8 (Dutiable transactions relating to trusts), division 3 (Creation and termination of trusts). (i) a trust acquisition or trust surrender. Note— See chapter 2, part 8 (Dutiable transactions relating to trusts), division 4 (Some basic concepts about trust acquisitions and trust surrenders). (2) It does not matter whether a dutiable transaction— (a) is effected by an instrument or another way; or (b) involves 1 or more parties. (3) Subsection (1) has effect subject to sections 21, 29 and 37. Note— Under section 21, the commissioner must decide the applicable dutiable transaction for imposition of duty if a transaction constitutes more than 1 type of dutiable transaction mentioned in subsection (1). Also, for when transactions for particular dutiable property are not dutiable transactions, see sections 29 and 37. (4) Without limiting subsection (1)(d), property is vested under statute law if the law vests property in an entity that the law states is the successor in law of, continuation of or same entity as, the entity in which the property was previously vested. (5) However, property is not vested under statute law, on the registration of a company under the Corporations Act, chapter 5B, part 5B.1. 10 What is dutiable property (1) Each of the following is dutiable property— (a) land in Queensland; (b) a transferable site area; (c) an existing right; (d) a Queensland business asset; (e) a chattel in Queensland. Note— Section 498 includes provision about references to dutiable property. (2) A reference to property in subsection (1) includes a reference to an interest in the property, other than the following— (a) a security interest; (b) a partner's interest in the partnership; (c) a trust interest; (d) the interest of a discretionary object of a trust that holds property mentioned in the subsection. Note— See the Acts Interpretation Act 1954, schedule 1, definition interest. 11 What is the dutiable value of a dutiable transaction (1) The dutiable value of a statutory dutiable transaction is the amount payable for the transaction. (2) The dutiable value of a dutiable transaction that is a partition is determined under section 31. (3) The dutiable value of a dutiable transaction that is the surrender of a lease of land in Queensland is the total of any premium, fine or other consideration payable for the surrender. (4) The dutiable value of a dutiable transaction that is the acquisition of a new right that is a lease of land in Queensland is the total of any of the following amounts payable for the lease— (a) premiums, fines or other consideration payable for the grant of the lease; (b) consideration paid for, or the value of, any moveable chattels taken over by the lessee from the lessor or outgoing lessee; (c) if, on the leased premises, a business is to be carried on and an amount in excess of what would be the rent if a business was not carried on is charged for the lease—the excess amount. (5) The dutiable value of a dutiable transaction that is a partnership acquisition is determined under part 7, division 3. (6) The dutiable value of a dutiable transaction that is a trust acquisition or trust surrender is determined under part 8, division 5. (6A) The dutiable value of a dutiable transaction that is an agreement for the transfer of dutiable property that is a farm-in agreement is determined under part 8A. (7) Subject to section 48, the dutiable value of another dutiable transaction is— (a) the consideration for the dutiable transaction; or (b) the unencumbered value of the dutiable property or new right the subject of the transaction if— (i) there is no consideration for the transaction; or (ii) the consideration can not be ascertained when the liability for transfer duty arises; or (iii) the unencumbered value is greater than the consideration for the transaction. (8) However, the dutiable value of particular dutiable transactions is subject to apportionment under part 4. 11A References to consideration To remove any doubt, it is declared that a reference to consideration is not limited to monetary consideration. 12 Consideration for dutiable transactions—general (1) The consideration for a dutiable transaction includes— (a) the amount of any liabilities assumed under the transaction, including an obligation, whether contingent or otherwise, to pay any unpaid purchase money payable under an agreement for the transfer of dutiable property; and (b) the amount or value of any debt to the extent it is released or extinguished under the transaction. (2) If the consideration, or any part of the consideration, for a dutiable transaction on which duty is imposed consists of an amount payable periodically and the total amount, including any interest, to be paid can be ascertained, the consideration or part of the consideration is the total amount. Note— For other provisions relevant to consideration, see sections 501 to 503. 13 Consideration for dutiable transaction—transfer by way of security The consideration for the transfer by way of security of dutiable property that is land is an amount equal to the unencumbered value of the dutiable property when the liability for transfer duty arises. 14 What is the unencumbered value of property (1) The unencumbered value of property is the value of the property determined without regard to— (a) any encumbrance to which the property is subject, whether contingently or otherwise; or (b) any arrangement— (i) the parties to which are not dealing with each other at arm's length; and (ii) that results in the reduction of the value of the property; or (c) any arrangement for which a significant purpose of any party to the arrangement was, in the commissioner's opinion, the reduction of the value of the property. Example for paragraph (c)— A owns land that B wishes to purchase. The land is valued at $1m. Before the purchase, A grants B a 50 year lease of the land. B is not required to pay any rent under the lease. A and B then enter into an agreement to transfer the land for $50,000, being the value of A's interest in the land taking into account that it is subject to the lease to B. The unencumbered value of the land is determined without regard to the grant of the lease if the commissioner is of the opinion there is an arrangement under which A or B's significant purpose in entering into it was to reduce the value of the land. (2) Also, the unencumbered value of property held on trust or by a partnership must be determined without regard to the liabilities of the trust or partnership, including for a trust, the liability to indemnify the trustee. (3) The unencumbered value of property that is the goodwill of a business includes the value of any restraint of trade arrangement entered into by the transferor or a related person of the transferor to protect the value of the goodwill acquired by the transferee. (4) If, before a dutiable transaction mentioned in section 9(1)(a), (b) or (d) for which the dutiable property is land, improvements are made to the land at the transferee's expense, the unencumbered value of the land must be determined as if the improvements had not been made. Note— For provisions about the aggregate minimum value of the shares comprising all of the issued capital of a corporation or society and the unencumbered value of each of the shares, see section 504. 15 When unencumbered value of property is determined The unencumbered value of dutiable property is determined— (a) for a dutiable transaction that is the surrender of the property—immediately before the surrender; or (b) for another dutiable transaction—when the liability for transfer duty arises. Part 3 Liability for transfer duty 16 When liability for transfer duty arises A liability for transfer duty imposed on a dutiable transaction in schedule 2, column 1, arises at the time stated opposite the transaction in schedule 2, column 2. Note— In relation to a dutiable transaction that is an ELN transfer or ELN lodgement, see also sections 156H and 156K. 17 Who is liable to pay transfer duty (1) Transfer duty imposed on a statutory dutiable transaction must be paid by the statutory entity under the transaction. (2) Transfer duty imposed on another dutiable transaction must be paid by the parties to the transaction. 18 Need for instrument, ELN transaction document or statement If a dutiable transaction is not effected or evidenced by an instrument or ELN transaction document, the parties liable to pay transfer duty on the transaction must make a statement in the approved form (a transfer duty statement) within the time stated in section 19 for lodging the statement. Maximum penalty—40 penalty units. 19 Lodging instrument, ELN transaction document or statement (1) The statutory entity under a statutory dutiable transaction must lodge— (a) the instrument or ELN transaction document that effects or evidences the transaction; or (b) the transfer duty statement for the transaction. (2) The statutory entity must comply with subsection (1)— (a) within 60 days after the liability arises to pay transfer duty on the transaction; or (b) if the amount payable for the transaction is to be decided by a court or tribunal—within 14 days after the amount is decided. (3) The parties liable to pay transfer duty relating to another dutiable transaction must, within 30 days after the liability arises, lodge— (a) the instrument or ELN transaction document that effects or evidences the transaction or transfer duty statement for the transaction; and (b) an approved form for the transaction. 20 Effect of making or lodging instrument, ELN transaction document or statement by 1 party The making of a transfer duty statement, or the lodging under section 19 of an instrument, ELN transaction document or transfer duty statement, by 1 of the parties to the dutiable transaction relieves the other parties to the transaction from complying with the requirement to make the statement under section 18 or lodge the instrument, ELN transaction document or transfer duty statement under section 19. 21 No double duty—general (1) If a transaction for property constitutes more than 1 dutiable transaction for the property and imposition of transfer duty on all of the dutiable transactions for the property would result in transfer duty being imposed more than once on the transaction, the commissioner must decide the dutiable transaction on which transfer duty is imposed. Notes— 1 For objections and appeals against assessments of duty, see the Administration Act, part 6. 2 For a dutiable transaction that is an ELN transfer or ELN lodgement, see also part 15, division 2. (2) For subsection (1), the commissioner must decide the dutiable transaction that is the most applicable dutiable transaction having regard to the provisions of this chapter and the primary purpose of the transaction. 22 No double duty—particular dutiable transactions (1) If transfer duty is imposed on a dutiable transaction for periodical payments of consideration, no duty is imposed under this Act on any agreement securing the periodical payments. (2) If transfer duty imposed on a dutiable transaction that is an agreement for the transfer of dutiable property is paid, no transfer duty is imposed on the transfer of the property to the transferee under the agreement. Note— For a dutiable transaction that is an ELN transfer or ELN lodgement, see also part 15, division 2. (2A) Also, if a payment commitment is made for a dutiable transaction that is an agreement for the transfer of dutiable property, no transfer duty is imposed on an ELN transfer of the dutiable property to the transferee under the agreement. Notes— 1 For a dutiable transaction that is an ELN transfer, see also part 15, division 2. 2 See part 15, division 3 in relation to the making of a payment commitment for an agreement for the transfer of dutiable property. (3) If the commissioner is satisfied— (a) a person (the agent) is appointed in writing as an agent for another person (the principal); and (b) under the appointment, the agent enters into a dutiable transaction that is an agreement for the transfer of dutiable property from a person (the original transferor) to the agent on behalf of the principal (the agreement); and (c) the principal provided all the consideration, including any deposit paid; and (d) transfer duty imposed on the agreement is paid; and (e) the dutiable property is later transferred to the principal by the original transferor or the agent (the agency transfer); no transfer duty is imposed on the agency transfer or the trust acquisition or trust surrender by the principal because of the agreement or agency transfer. (4) For subsection (3)(a), the commissioner must not be satisfied the person was properly appointed as agent unless the original instrument of appointment, or a copy of it, is lodged. (5) If— (a) there is an agreement for the transfer of dutiable property (the first agreement); and (b) after the first agreement takes place, 1 or more agreements to transfer all or part of the dutiable property the subject of the first agreement takes place (the intervening agreements); and (c) to give effect to the first agreement and the intervening agreements, 1 or more transfers of dutiable property (the transfers) are effected by 1 or more parties to the first agreement and the intervening agreements; and (d) transfer duty imposed on the first agreement and the intervening agreements is paid; no transfer duty is imposed on the transfers. Example for subsection (5)— On 1 July, under an agreement for transfer, A agrees to sell land in Queensland to B for $100,000. Settlement is to take place on 31 July. On 7 July, under an agreement for transfer, B agrees to sell the land to C for $120,000. Again, settlement is to take place on 31 July. Before 31 July, B directs A, that at settlement, A transfer the land to C. The agreement between A and B is the first agreement. The agreement between B and C is the intervening agreement. No transfer duty is imposed on the transfer from A to C if transfer duty on the first and intervening agreements has been paid. 23 When credit to be allowed for duty paid (1) If section 14(1)(c) is applied to determine the value of land because of a lease or occupancy right, in assessing the transfer duty payable for the dutiable transaction that is the transfer, or agreement for the transfer, of the land, a credit must be allowed for any lease duty paid under repealed chapter 4 for the lease or right. (2) Subsection (3) applies if— (a) transfer duty is paid on a dutiable transaction that is an option to acquire dutiable property (the first transaction); and (b) on the exercise of the option, transfer duty is payable on the dutiable transaction for the acquisition of the dutiable property (the later transaction); and (c) under the option, the consideration paid for the option is part of the consideration for the later transaction. (3) In assessing the transfer duty on the later transaction, a credit must be allowed for the transfer duty paid for the first transaction. (4) In this section— repealed chapter 4 means chapter 4 (Lease duty) as it was in force from time to time before its repeal by the Revenue Legislation Amendment Act 2005. 24 Rates of transfer duty (1) The rate of transfer duty imposed on a dutiable transaction that is the transfer, or an agreement for the transfer, of an existing right of a holder of the following is $5— (a) a mortgage, including the debt secured by the mortgage, that is solely over land in Queensland; (b) another mortgage, including the debt secured by the mortgage, that is incidental to, and transferred in connection with, a mortgage mentioned in paragraph (a) (a primary mortgage) if the primary mortgage is the principal security held by the transferor. (2) The rate of transfer duty imposed on another dutiable transaction is stated in schedule 3, column 2, opposite the dutiable value of the transaction in schedule 3, column 1. 25 Payment of transfer duty for deeds of grant and particular freeholding leases (1) This section applies if transfer duty is imposed on a dutiable transaction that is— (a) a grant of land in fee simple under the Land Act 1994; or (b) an acquisition of a new right that is a post-Wolfe freeholding lease under the Land Act 1994. (2) Within 30 days after the liability for the duty arises, the grantee or lessee must pay the duty to the chief executive of the department in which the Land Act 1994 is administered. Part 4 Apportionment of consideration or unencumbered value for particular dutiable transactions 26 Apportionment—head office or principal place of business in Queensland (1) This section applies for determining the consideration for a dutiable transaction for or relating to, or the unencumbered value of, dutiable property that is a Queensland business asset, other than a debt or personal property, of a Queensland business that has its head office or principal place of business in Queensland if, at any time during the 3 financial years preceding the dutiable transaction concerned— (a) a supply of land, money, credit or goods or any interest in them, or provision of services, has been made by the business to customers outside Queensland; or (b) the asset has been used, exploited or exercised in, or relates to, a place outside Queensland. (2) A reference in this chapter to consideration for the transaction or the unencumbered value of the property is taken to be a reference to the amount (the apportioned amount) worked out using the following formula— where— AA means the apportioned amount. CUV means the consideration for the dutiable transaction or unencumbered value of the Queensland business asset mentioned in subsection (1). OS means the gross amount of the supplies and provision of services made by the business to its customers in other States during the 3 completed financial years preceding the dutiable transaction. TS means the gross amount of supplies and provision of services made by the business to all its customers during the 3 completed financial years preceding the dutiable transaction. (3) However, the commissioner may decide the consideration for the dutiable transaction or the unencumbered value of the dutiable property on another basis if the commissioner is satisfied the other basis would be more appropriate in particular circumstances. 27 Apportionment—head office or principal place of business in another State (1) This section applies for determining the consideration for a dutiable transaction for or relating to, or the unencumbered value of, dutiable property that is a Queensland business asset, other than a debt or personal property, of a Queensland business that does not have its head office or principal place of business in Queensland if, at any time during the 3 financial years preceding the dutiable transaction concerned— (a) a supply of land, money, credit or goods or any interest in them, or provision of services, has been made by the business to customers in Queensland; or (b) the asset has been used, exploited or exercised in, or relates to, Queensland. (2) A reference in this chapter to consideration for the transaction or the unencumbered value of the property is taken to be a reference to the amount (the apportioned amount) worked out using the following formula— where— AA means the apportioned amount. CUV means the consideration for the dutiable transaction or unencumbered value of the Queensland business asset mentioned in subsection (1). QS means the gross amount of the supplies and provision of services made by the business to its Queensland customers during the 3 completed financial years preceding the dutiable transaction. TS means the gross amount of supplies and provision of services made by the business to all its customers during the 3 completed financial years preceding the dutiable transaction. (3) However, the commissioner may decide the consideration for the dutiable transaction or the unencumbered value of the dutiable property on another basis if the commissioner is satisfied the other basis would be more appropriate in particular circumstances. 28 Apportionment of particular dutiable transactions relating to existing and new rights (1) This section applies for determining— (a) the consideration for a dutiable transaction for or relating to an existing right or acquisition of a new right on its creation, grant or issue if the right is exercisable or relates to the conduct of a business or activity outside Queensland; or (b) the unencumbered value of dutiable property that is an existing right if the right is exercisable or relates to the conduct of a business or activity outside Queensland; or (c) the unencumbered value of a new right on its creation, grant or issue if the right is exercisable or relates to the conduct of a business or activity outside Queensland. (2) A reference in this chapter to consideration for the transaction or the unencumbered value of the right is taken to be a reference to the amount that represents the same proportion of the consideration or unencumbered value that the unencumbered value of the right, to the extent it is exercisable or relates to the conduct of a business or activity in Queensland, bears to the total unencumbered value of the right. (3) However, the commissioner may decide the consideration for the dutiable transaction or the unencumbered value of the right on another basis if the commissioner is satisfied the other basis would be more appropriate in particular circumstances. Part 5 Dutiable transactions relating to dutiable property 29 When transaction for chattel is not dutiable transaction (1) If a chattel in Queensland is the subject of a transaction, the transaction is not a dutiable transaction unless— (a) another type of dutiable property is the subject of the same transaction; or (b) under section 30, it is aggregated with a dutiable transaction that is not for a chattel. (2) For subsection (1)(b), section 30 applies as if the transaction were a dutiable transaction. 30 Aggregation of dutiable transactions (1) This section applies to dutiable transactions that together form, evidence, give effect to or arise from what is, substantially 1 arrangement. (2) For assessing transfer duty on each of the dutiable transactions, the transactions must be aggregated and treated as a single dutiable transaction. Example for subsection (2)— A conducts a business of manufacturing bullbars. A agrees to sell the business to B as a going concern for $50,000,000. The property included in the agreement comprises land, plant and equipment, goodwill and the business name. The land is dutiable property being land in Queensland and each of the other assets are dutiable property being Queensland business assets. The agreement, so far as it relates to the sale of the land, is a dutiable transaction being an agreement to transfer land in Queensland and, so far as it relates to the agreement to sell each of the business assets, is a dutiable transaction being an agreement to transfer dutiable property that is a Queensland business asset. Accordingly, there are 4 dutiable transactions under the agreement. Because the dutiable transactions together form 1 arrangement, they must be aggregated under this section for imposing transfer duty. (3) For subsection (1), all relevant circumstances relating to the dutiable transactions must be taken into account in deciding whether they together form, evidence, give effect to or arise from what is, substantially 1 arrangement. (4) For subsection (3), relevant circumstances include the following— (a) whether the transactions are contained in 1 instrument; (b) whether any of the transactions are conditional on entry into, or completion of, any of the other transactions; (c) whether the parties to any of the transactions are the same; (d) whether any party to a transaction is a related person of another party to any of the other transactions; (e) the time over which the transactions take place; (f) whether, before the transactions take place, the dutiable property the subject of the transactions was used together, or dependently with one another, by the transferor or transferors; (g) whether, after the transactions take place, the dutiable property the subject of the transactions will be used together, or dependently with one another, by the transferee or transferees. (5) Transfer duty imposed on the dutiable transaction aggregated under this section must— (a) be assessed on the total of the dutiable values of the transactions when the liability for transfer duty for each of the transactions arose; and (b) be apportioned between the transactions as decided by the commissioner. Example for subsection (5)— Under 4 agreements between a builder and a developer, the builder agrees to purchase 4 lots of land from the developer for $100,000 each. The lots are dutiable property being land in Queensland and each of the agreements is a dutiable transaction being an agreement to transfer land in Queensland. Even though the sale of the 4 lots was negotiated at the same time, the agreements were signed on different dates over a 10 month period, had different settlement dates and were not conditional on each other. Under section 24 (Rates of transfer duty) and schedule 3 (Rates of duty on dutiable transactions and relevant acquisitions for landholder and corporate trustee duty), the agreements for lots 1 to 3 have been separately stamped for $2,350 transfer duty. When the agreement for lot 4 is lodged for stamping, the commissioner decides this section applies because the transactions together formed 1 arrangement. Accordingly, the transactions must be aggregated under this section for imposing transfer duty and the duty apportioned between them. Under subsection (5)(a), the total of the dutiable values of the dutiable transactions on which transfer duty is imposed is $400,000, being the value of each of the lots when the liability for transfer duty arose for each of the transactions, regardless of a variation in the values since the liability arose. Under section 24 and schedule 3, transfer duty imposed on the aggregated transaction is $12,475. If the commissioner decides to apportion the transfer duty equally between the dutiable transactions, the amount of transfer duty payable is $3,118.75 for each transaction. Under the Administration Act, part 3, the commissioner will make a reassessment for the transactions for lots 1 to 3. The assessment notice must state the matters mentioned in section 26(2) of that Act. (6) Each party to each of the dutiable transactions must, when lodging the instrument, ELN transaction document or transfer duty statement relating to the transaction, give notice to the commissioner stating details known to the party about— (a) all of the dutiable property included or to be included in the arrangement mentioned in subsection (1); and (b) the dutiable value of each dutiable transaction. Note— Under the Administration Act, the requirement under this subsection is a lodgement requirement for which a failure to comply is an offence under section 121 of that Act. (7) This section does not apply to a dutiable transaction to the extent that it relates to an exchange of dutiable property. 31 Partitions (1) This section applies to a dutiable transaction under which the following happens (the partition)— (a) dutiable property held by persons jointly as joint tenants or tenants in common (each a co-owner) is transferred, or agreed to be transferred, to 1 or more of the co-owners; (b) the dutiable property transferred, or agreed to be transferred, includes the interest held by the transferee in the property immediately before the transaction. (2) The dutiable value of the dutiable transaction is the greater of the following— (a) the amount by which the unencumbered value of the dutiable property transferred, or agreed to be transferred, is more than the unencumbered value of the interest held by the transferee in the property immediately before the transaction; (b) the consideration paid by any party to the transaction. (3) This section does not apply to a transaction if section 48 applies to the transaction. 32 Transfer by way of security—land (1) This section applies if the commissioner is satisfied— (a) there has been a dutiable transaction that is a transfer of dutiable property by way of security (the original transfer); and (b) the property is land; and (c) transfer duty has been paid on the transaction; and (d) the property has been retransferred to the person who transferred it by way of security (the retransfer) or has been transferred to a person to whom the property has been transmitted by death or bankruptcy (also the retransfer). (2) The commissioner must make a reassessment of transfer duty paid on the original transfer to reduce the duty to the amount that would have been payable if the amount secured by the transfer had been secured by a mortgage for which mortgage duty were imposed. (3) Transfer duty is not imposed on the dutiable transaction that is the retransfer. (4) Subsection (2) applies to the reassessment despite the limitation period under the Administration Act for reassessments. Note— See the Administration Act, part 3 (Assessments of tax), division 3 (Reassessments). 33 Transfer by way of security—other dutiable property (1) Transfer duty is not imposed on a dutiable transaction if— (a) the transaction is a transfer of dutiable property by way of security; and (b) the property is not land. (2) Subsection (3) applies if— (a) after the transfer by way of security, the transferee, or the transferee's assignee, acquires ownership of the dutiable property free from any interest of the transferor, or transferor's assignee; and (b) the transferee, or the transferee's assignee, were to newly acquire the dutiable property at the time of the acquisition mentioned in paragraph (a), the acquisition would be a dutiable transaction. (3) The acquisition of the ownership of the dutiable property by the transferee is taken to be a dutiable transaction and transfer duty imposed on the transaction must be reduced by the amount of mortgage duty, if any, paid on the transfer. Part 6 Special provisions about dutiable transactions relating to Queensland business assets Division 1 Some basic concepts about Queensland businesses and their assets 34 What is a Queensland business asset A Queensland business asset is a business asset of a Queensland business. 35 What is a business asset (1) Each of the following is a business asset— (a) goodwill; (b) a statutory business licence used for carrying on a business; (c) a right to use a statutory business licence used for carrying on a business; (d) the business name used for carrying on a business; (e) a right under a franchise arrangement used for carrying on a business; (f) a debt of a business if the debtor resides in Queensland; (g) a supply right of a business; (h) intellectual property used for carrying on a business; (i) personal property in Queensland of a business. (2) For subsection (1)— (a) a business asset mentioned in subsection (1)(b) that is issued or given under— (i) a Queensland Act is used for carrying on a business; or (ii) a Commonwealth Act is used for carrying on a business if it is used, exploited or exercised in Queensland; and (b) another business asset is used for carrying on a business if it is used, exploited or exercised in Queensland. 36 What is a Queensland business A Queensland business is a business— (a) that is conducted on or from a place in Queensland; or (b) the conduct of which consists wholly or partly of supplying land, money, credit or goods or any interest in them, or providing any service, to Queensland customers; or (c) that has ceased but satisfied paragraph (a) or (b) at any time in the 1 year before a dutiable transaction that is the transfer, or agreement for the transfer, of an asset of the business. Example for paragraph (c)— A business conducted from a place in Queensland goes into liquidation. Three months after the business stops trading, the liquidator transfers business assets of the business. For determining whether the transfer of the business assets is a dutiable transaction, the business is a Queensland business because paragraph (a) was satisfied in the 1 year before the transfer. Division 2 Transactions for particular assets of Queensland businesses 37 When transaction for particular Queensland business assets not dutiable transaction (1) If a debt of a business that is evidenced by a negotiable instrument is the subject of a transaction, the transaction is not a dutiable transaction unless— (a) another type of dutiable property is the subject of the same transaction or, under section 30, it is aggregated with a dutiable transaction; or (b) under the transaction, the negotiable instrument is or is to be transferred with all, or substantially all, of the negotiable instruments of the business. (2) If a supply right of a business is the subject of a transaction, the transaction is not a dutiable transaction unless— (a) another type of dutiable property is the subject of the same transaction or, under section 30, it is aggregated with a dutiable transaction; or (b) under the transaction, the supply right is or is to be transferred with all, or substantially all, of the supply rights of the business. (3) If intellectual or personal property of a business is the subject of a transaction, the transaction is not a dutiable transaction unless, under section 30, it is aggregated with 1 or more of the following— (a) a dutiable transaction for a Queensland business asset, other than intellectual or personal property; (b) a dutiable transaction for land in Queensland. (4) For subsections (1)(a), (2)(a) and (3), section 30 applies as if the transaction were a dutiable transaction. 38 When consignment of trading stock of Queensland business is a dutiable transaction (1) This section applies if— (a) the owner of a Queensland business transfers or agrees to transfer a Queensland business asset, other than trading stock of the business, to a person (the new owner); and (b) the owner places all or most of the trading stock on consignment for sale by a person, whether or not the new owner, (the consignee) in the conduct of the business by the new owner; and (c) having regard to the terms of the consignment it is reasonable to conclude that the consignment is, or is part of, an arrangement to avoid transfer duty. (2) Without limiting subsection (1)(c), the terms of the consignment include the following— (a) the amount payable to the owner by the consignee and the terms of payment; (b) the price ultimately payable to the owner for the trading stock and the way in which it is worked out; (c) the basis of working out the consignee's commission; (d) the right of the consignee to mix the trading stock with other property not owned by the owner; (e) the right of the consignee to deal with the trading stock as if it were the consignee's or other than as agent of the owner. (3) The placing of the trading stock on consignment is taken to be a transfer of the stock. Note— Accordingly, the transfer is a dutiable transaction being the transfer of a Queensland business asset because trading stock is a business asset being personal property. 39 Surrender of Queensland business asset so replacement asset may be granted (1) This section applies if a Queensland business asset is surrendered by a person (the owner) so that a similar business asset may be granted, issued, given to or obtained by another person. (2) For imposing transfer duty— (a) the surrender is taken to be a transfer of the business asset by the owner to the other person when the similar business asset is granted, issued, given or obtained; and (b) the owner and other person are the parties to the dutiable transaction that is the transfer of the business asset. Part 7 Dutiable transactions relating to partnerships Division 1 Preliminary 40 Interpretation for property held by partnership or trust A reference to a partnership or trust holding property is a reference to the holding of the property by the partners for the partnership or trustees on trust. Division 2 Some basic concepts about partnership acquisitions 41 What is a partnership acquisition A person makes a partnership acquisition if the person acquires a partnership interest in a partnership that— (a) holds dutiable property; or (b) has an indirect interest in dutiable property. Note— Section 498 includes provision about references to dutiable property. 42 What is a partner's partnership interest (1) A partner's partnership interest is— (a) if the partner has a variable partnership entitlement under subsection (2)—the proportion that the value of the partner's entitlements as a partner bears to the value of the entitlements of all partners in the partnership expressed as a percentage; or (b) if the partner is entitled only to share in the profits of the partnership and has given or is required to give consideration, or has made or is required to make a contribution to the capital of the partnership, for the acquisition of the profit-sharing right—the partner's profit-sharing percentage; or (c) if paragraph (a) or (b) does not apply—the greater of the following— (i) the percentage of the capital of the partnership the partner has contributed or is obliged to contribute; (ii) the percentage of the losses of the partnership the partner is required to bear. (2) For subsection (1)(a), a partner has a variable partnership entitlement in a partnership if, in the ordinary course of determining the partner's entitlement to share in the profits or obligation to contribute to the capital or losses of the partnership, the entitlement or obligation varies or may vary from time to time. 43 What is a partnership's indirect interest in dutiable property A partnership has an indirect interest in dutiable property if— (a) through a partnership interest or trust interest there is a connection between the partnership and dutiable property of the other partnership or trust; or (b) through a series of partnership interests or trust interests, or a combination of any of them, there is a connection between the partnership and dutiable property of a partnership or trust in the series. 44 Acquiring a partnership interest (1) A person acquires a partnership interest if a partnership is formed or the person's partnership interest increases. (2) Without limiting subsection (1)— (a) a partnership may be formed on— (i) a change in the membership of a partnership; or (ii) the merger of 2 or more partnerships; or (b) a person's partnership interest may increase— (i) under the terms of a partnership agreement; or (ii) on the retirement of a partner from a partnership; or (iii) on a change in the terms of a partnership agreement effecting a change in the interests of the partners. (3) However, a partner's variable partnership entitlement under section 42 does not increase if— (a) the partner's entitlement to share in the profits or obligation to contribute to the capital or losses of the partnership increases merely because of the partner's performance as a partner; and (b) there is no arrangement stating— (i) the extent of the future variation to the partner's entitlement or obligation; or (ii) the consideration for the variation. Division 3 Dutiable value of partnership acquisitions 45 What is the dutiable value of a partnership acquisition The dutiable value of a partnership acquisition is the greater of the following— (a) the consideration for the acquisition so far as the consideration relates to dutiable property, or an indirect interest in dutiable property, held by the partnership; (b) the value of the acquisition worked out under section 46 or 47. 46 What is the value of a partnership acquisition—general (1) Subject to subsections (5) and (6), the value of a partnership acquisition is the total of the amounts worked out by applying the partner's partnership interest to the unencumbered value, when the liability for transfer duty arises, of— (a) the dutiable property held by the partnership (the relevant partnership); and (b) any indirect interest in dutiable property held by the relevant partnership. (2) For subsection (1)(b), the unencumbered value of an indirect interest under section 43(a) of the relevant partnership is the amount worked out by applying to the unencumbered value of the dutiable property held by the entity in which the relevant partnership has a partnership or trust interest, the partnership or trust interest of the relevant partnership in that entity. (3) For subsection (1)(b), the unencumbered value of an indirect interest under section 43(b) of the relevant partnership is the amount worked out by— (a) first applying to the unencumbered value of the dutiable property held by the ultimate entity, the partnership or trust interest of the partnership or trust (the last partner or beneficiary) that is a partner or beneficiary of the ultimate entity; and (b) applying to the amount worked out under paragraph (a), and the unencumbered value of any dutiable property held by the last partner or beneficiary, the partnership or trust interest of the next partnership or trust in the series of partnerships or trusts that is a partner or beneficiary of the last partner or beneficiary; and (c) applying the calculation in paragraph (b) for each of the other partnerships or trusts in the series until the first entity's partnership interest or trust interest is used in the calculation; and (d) applying to the amount last worked out under paragraph (c) and the unencumbered value of any dutiable property held by the first entity, the partnership or trust interest of the relevant partnership. (4) Schedule 4 contains an example of how the value of a partnership acquisition is worked out. (5) For determining the value of a new partner's partnership acquisition on formation of a partnership, the value of any dutiable property the partner contributed to the partnership on its formation must be disregarded. (5A) For subsection (5), a person is a new partner only if— (a) the person was not in partnership with any partners of the partnership immediately before its formation; or (b) on the person's partnership acquisition, the person becomes a partner in an additional partnership to a partnership in which the person is a partner with any partners of the additional partnership immediately before its formation. (5B) However, subsection (5A)(b) does not apply to a person who makes a partnership acquisition in a partnership that was formed because of a change in the membership of the partners of another partnership (the old partnership) if the person had a partnership interest in the old partnership. (6) For determining the value of a partner's partnership acquisition that is an increase in the partner's partnership interest, the partner's partnership interest is taken to be the increase in the partner's partnership interest. 47 What is the value of a partnership acquisition—merger of 2 or more partnerships (1) This section applies if— (a) a person (the partner) first makes a partnership acquisition (the new partnership acquisition) on the merger of 2 or more partnerships; and (b) the person had a partnership interest (the old partnership interest) in 1 of the merging partnerships; and (c) the partner were to make a partnership acquisition for the old partnership interest immediately before the merger, the value of the partnership acquisition would include all or part of the unencumbered value of dutiable property (the continuing property) that becomes dutiable property of the merged partnership. (2) The value of the new partnership acquisition must be reduced by the lesser of— (a) the amount that would be the value of the new partnership acquisition if the dutiable property of the merged partnership comprised only the continuing property; or (b) the amount that represents the value of the partner's partnership acquisition for the old partnership interest mentioned in subsection (1)(c) immediately before the merger worked out as if the dutiable property of the former partnership comprised only the continuing property. Example for working out dutiable value under this section— X is a 30% partner in the XYZ partnership that has dutiable property of $10m. The XYZ partnership merges with another partnership, to form a new partnership (the merged partnership). X has a 40% partnership interest in the merged partnership. The merged partnership has dutiable property with an unencumbered value of $12m, including $2m of the dutiable property of the XYZ partnership (the continuing property). The value of X's new partnership acquisition is worked out as follows— Example— 1 The value of X's interest in the merged partnership is $4.8m, being 40% (X's partnership interest in the merged partnership) of $12m (the unencumbered value of the merged partnership's dutiable property). 2 The reduction under subsection (2)(a) is $800,000, being 40% (X's partnership interest in the merged partnership) of $2m (the continuing property). 3 The reduction under subsection (2)(b) is $600,000, being 30% (X's partnership interest in the XYZ partnership) of $2m (the continuing property). The value of X's partnership acquisition is $4.2m, being $4.8m less $600,000 which is the lesser of the amounts worked out under subsection (2). Division 4 Dutiable value of other dutiable transactions for dutiable property of partnership 48 Dutiable value of dutiable transaction reduced for transfer of dutiable property to partner on retirement or dissolution (1) This section applies if, on a person (the retiring partner) ceasing to be a partner in a partnership because of the retiring partner's retirement from the partnership or its dissolution, dutiable property of the partnership is transferred or agreed to be transferred to the retiring partner. (2) The dutiable value of the dutiable transaction for the transfer, or agreement for the transfer, of the dutiable property to the retiring partner must be reduced by an amount worked out by applying the retiring partner's partnership interest in the partnership to the unencumbered value of the dutiable property immediately before the retirement or dissolution. Example for subsection (2)— A, B and C are in partnership in equal shares. B had a one-third partnership interest immediately before retiring. On B ceasing to be a partner, A and C transfer land to B. The dutiable value of the land acquired by B will be reduced by one-third. Part 8 Dutiable transactions relating to trusts Division 1 Preliminary 49 Application of pt 8 (1) This part applies to all expressly or intentionally created trusts, regardless of how they are created. (2) However, this part does not apply to a trust acquisition or trust surrender of a trust interest in a public unit trust other than a majority trust acquisition in a land holding trust. Notes— 1 For subsection (2), see division 7 (Public unit trusts), subdivisions 7 (Majority trust acquisitions in land holding trusts) and 8 (Indirect trust interests). 2 An acquisition of an interest in a listed unit trust that is a landholder may be dutiable under chapter 3, part 1 (Landholder duty). 50 Joint trustees If a trust has 2 or more trustees, the trustees are taken to be a single person for this chapter. Note— Under section 65, trustees are jointly and severally liable for transfer duty payable. Division 2 Some basic concepts about property 51 Interpretation for property held by trust or partnership A reference to a trust or partnership holding property is a reference to the holding of the property by the trustees on trust or the partners for the partnership. 52 Contracted property and trust interests (1) For a trust, contracted property is taken to be dutiable property held by the trust. (1A) If a trust has made a purchase or sale agreement for a trust interest, the trust is taken to have an indirect interest in the trust-related dutiable property. (2) For determining the dutiable value of a trust creation, trust termination, trust acquisition or trust surrender— (a) a sale agreement made by the trustee is taken not to have been made; and (b) a purchase agreement made by the trustee is taken to have been completed. (3) Subsection (3A) applies if— (a) contracted property, or an indirect interest in dutiable property mentioned in subsection (1A), is included in determining the dutiable value of a trust creation, trust termination, trust acquisition or trust surrender; and (b) afterwards, the sale agreement for the property or trust interest is completed or the purchase agreement for the property or trust interest is not completed. (3A) The commissioner must make a reassessment as if the contracted property or indirect interest were never held by the trust. (4) For the reassessment, the parties liable to pay transfer duty on the trust creation, trust termination, trust acquisition or trust surrender must lodge the instruments required for the original assessment. (5) In this section— purchase agreement includes an uncompleted agreement, whether or not conditional, for the acquisition of a trust interest through which the trust would have, if the agreement were completed, an indirect interest in dutiable property (the trust-related dutiable property). sale agreement includes an uncompleted agreement, whether or not conditional, for the disposal of a trust interest through which the trust has an indirect interest in dutiable property (also the trust-related dutiable property). Division 3 Creation and termination of trusts 53 Creating trust of dutiable property (1) A trust of dutiable property is created if a person, who has acquired property other than as trustee, starts to hold the property as trustee. (2) Also, a trust of dutiable property is created if all the following apply— (a) a person holds dutiable property on trust (trust 1); (b) the person is also trustee of another trust (trust 2); (c) the person ceases to hold the dutiable property as trustee of trust 1 and starts to hold the dutiable property as trustee for trust 2; (d) when the person starts to hold the dutiable property as trustee for trust 2— (i) a person who has a trust interest for the dutiable property under trust 2 did not have a trust interest for that property when it was held for trust 1; or (ii) a person who has a trust interest for the dutiable property under trust 2 had a trust interest for that property when it was held for trust 1 and that person's trust interest increases. Note— Section 498 includes provision about references to dutiable property. 54 Terminating trust of dutiable property A trust of dutiable property is terminated if a person, having held the property as trustee, starts to hold the property other than as trustee. Division 4 Some basic concepts about trust acquisitions and trust surrenders 55 What is a trust acquisition A person makes a trust acquisition if the person acquires a trust interest in a trust that— (a) holds dutiable property; or (b) has an indirect interest in dutiable property. Note— Under section 81, an indirect trust acquisition in a land holding trust is taken to be a trust acquisition. An indirect trust acquisition is the acquisition of an interest in a land holding trust through 1 or more corporations, partnerships or trusts, or a combination of any of them. See definitions indirect trust acquisition and indirect trust interest in the dictionary. 56 What is a trust surrender A person makes a trust surrender if the person surrenders a trust interest in a trust that holds dutiable property or has an indirect interest in dutiable property. 57 What is a trust interest (1) A trust interest is a person's interest as a beneficiary of a trust, other than a life interest. (2) For a trust that is a discretionary trust, only a taker in default of an appointment by the trustee can have a trust interest. (3) Also, for a trust that is a superannuation fund, a member of the fund has a trust interest in the fund. Note— For exemption from transfer duty for a trust acquisition or surrender of a member's interest in a superannuation fund, see section 119. 58 What is a trust's indirect interest in dutiable property A trust has an indirect interest in dutiable property if— (a) through a trust interest or partnership interest, there is a connection between the trust and dutiable property of the other trust or partnership; or (b) through a series of trust interests or partnership interests, or a combination of any of them, there is a connection between the trust and dutiable property of a trust or partnership in the series. 59 Acquiring a trust interest (1) A person acquires a trust interest if— (a) the person becomes a beneficiary of a trust, whether on creation of the trust or otherwise; or (b) being a beneficiary of a trust, the person's trust interest increases, other than because of the surrender of another person's trust interest in the trust for which transfer duty has been paid. (2) If a beneficiary's trust interest is subject to a prior life interest, the interest does not increase merely because the life tenant dies or, over time, the extent of the life interest reduces. 60 Beneficiary's trust interest is percentage of or proportionate to property held on trust (1) A beneficiary's trust interest is— (a) for a beneficiary who is a taker in default under a discretionary trust— (i) the percentage of the trust income or trust property the beneficiary would receive in default of appointment by the trustee; or (ii) if the beneficiary would receive both trust income and trust property in default of appointment by the trustee, the greater percentage of the trust income or trust property the beneficiary would receive; or (b) for a beneficiary of a trust, other than a discretionary trust, whose entitlement is solely to income of the property held on trust—the proportion that the value of the beneficiary's entitlement bears to the value of the entitlements of all beneficiaries expressed as a percentage; or (c) for another beneficiary—the proportion that the beneficiary's entitlement under the trust bears to the unencumbered value of the property held on trust expressed as a percentage. (2) For subsection (1)(c), the beneficiary's entitlement under the trust is— (a) the amount of the unencumbered value of the property held on trust that the beneficiary could receive as a result of the acquisition of the beneficiary's trust interest determined at the time of acquisition of the interest; or (b) the entitlement stated in subsection (3) if— (i) the beneficiary's entitlement under the trust is not subject to a prior life interest; and (ii) the beneficiary's entitlement under the trust may increase, including from nothing, on the fulfilment of any condition, contingency or the exercise or non-exercise of any power or discretion; and (iii) the condition, contingency, power or discretion is part of an arrangement a significant purpose of which is to lessen the amount of the beneficiary's entitlement at a particular time. (3) For subsection (2)(b), the beneficiary's entitlement under the trust is the maximum interest in the property held on trust that the beneficiary would have on the fulfilment of the condition or contingency or the exercise or non-exercise of the power or discretion. (4) For a majority trust acquisition, a reference in this section to a beneficiary's entitlement under the trust includes the entitlement under the trust of related persons of the beneficiary. 61 Who is a related person (1) A person is a related person of another person if— (a) for individuals—they are members of the same family; or (b) for an individual and a corporation—the person or a member of the person's family is a majority shareholder, director or secretary of the corporation or a related body corporate of the corporation, or has an interest of 50% or more in it; or (c) for an individual and a trustee—the person or a related person under another provision of this section is a beneficiary of the trust; or (d) for corporations—they are related bodies corporate; or (e) for a corporation and a trustee—the corporation or a related person under another provision of this section is a beneficiary