South Australian Current Acts South Australian Current Acts13A—Land tax for discretionary trust if beneficiary notified to
Commissioner
(1) A trustee of a
discretionary trust to which land is subject may, not later than 31 December
2021, lodge with the Commissioner a written notice
specifying 1 beneficiary of the trust who, subject to
subsections (13) and (14), is to be taken to be the designated
beneficiary of the trust for the purposes of this section.
(2) For the avoidance
of doubt, a trust may only have 1 person who is the designated
beneficiary for the purposes of this section (and may only substitute the
designated beneficiary by notice lodged under subsection (5)).
(3) A notice takes
effect, at the option of the trustee (which must be specified in the notice),
for the tax year in which the notice is lodged or for the previous or
following year, and remains in force until it is withdrawn by the trustee or
until the designated beneficiary notifies the Commissioner, in writing, that
they no longer consent to being the designated beneficiary (in which case the
notice is deemed to have been withdrawn by the trustee).
(4) A designated
beneficiary may be substituted—
(a) if
the designated beneficiary dies or becomes incapacitated; or
(b) if
the Commissioner is satisfied that, because of a marriage, de facto
relationship or domestic relationship that has broken down irretrievably, the
designated beneficiary will no longer be a beneficiary of the trust; or
(c) in
circumstances prescribed by the regulations.
(5) If the designated
beneficiary may be substituted in accordance with subsection (4), a
trustee of the trust may lodge with the Commissioner a written notice—
(a)
advising the Commissioner of the grounds on which the designated beneficiary
may be substituted; and
(b)
specifying the name of another beneficiary of the trust who is to be taken to
be the designated beneficiary for the purposes of this section in place of the
beneficiary named in the original notice.
(6) If a written
notice is lodged under subsection (5)—
(a)
subject to subsection (13), the beneficiary of the trust specified in the
notice becomes the designated beneficiary of the trust; and
(b) the
notice under subsection (1) is taken to have been varied accordingly.
(7) A notice under
this section must be in the form, and contain the information, determined by
the Commissioner.
(8) Despite
subsection (1), if a trustee withdraws a notice that is in force under
this section in respect of a discretionary trust, the trustee cannot lodge
another notice under this section in respect of that discretionary trust.
(9) If a notice is in
force under this section for a discretionary trust, the following provisions
apply:
(a) the
designated beneficiary of the trust is deemed, for the purposes of this Act
(other than a residential land exemption), to be the owner (but not to the
exclusion of the trustee) of land that was subject to the trust at the
prescribed time
("pre-existing trust land") and is liable for land tax on that land
accordingly, together with any other land owned by the beneficiary, assessed
in accordance with section 8A(1) at the rates set out in Schedule 1
Part 2;
(b)
however, if any pre-existing trust land—
(i)
constitutes the principal place of residence of the
designated beneficiary; and
(ii)
would, if it were owned by a natural person, be wholly or
partially exempted from land tax under a residential land exemption,
the designated beneficiary is deemed to be the owner of the land for the
purposes of the residential land exemptions;
(c) the
trustee for the trust is to be assessed for land tax on the whole of the land
subject to the trust as if the land were the only land owned by the
trustee—
(i)
in the case of pre-existing trust land—in
accordance with section 8A(1) at the rates set out in Schedule 1
Part 2; or
(ii)
in the case of land that became subject to the trust
after the
prescribed time ("subsequent trust land")—in accordance with
section 8A(1a) at the rates set out in Schedule 1 Part 3; or
(iii)
in the case where land subject to the trust consists of
both pre-existing trust land and subsequent trust land—in accordance
with the following formula:
Where—
"L" is the land tax assessed for the trustee
"R" "1" is the applicable rate of land tax set out in Schedule 1
Part 2
"R" "2" is the applicable rate of land tax set out in Schedule 1
Part 3
"T" is the total taxable value of all taxable land subject to the trust
"A" is the total taxable value of the pre-existing trust land subject to the
trust
"B" is the total taxable value of the subsequent trust land subject to the
trust.
Note—
If the designated beneficiary is exempt from land tax under
paragraph (b), the trustee will also be exempt because the effect of the
residential land exemptions is to render the land exempt from land tax.
(10) If land subject
to the trust constitutes the principal place of residence of the trustee, this
section does not affect the application of a residential land exemption to the
land.
(11) Any land tax
payable by the trustee under subsection (9)(c) in respect of pre-existing
trust land is to be deducted from land tax payable by the designated
beneficiary.
Note—
The deduction is applied to the total land tax assessed for the designated
beneficiary and not just to the land tax assessed for the land subject to the
trust.
(12) If a deduction
under subsection (11) would result in a negative amount—
(a) zero
is to be substituted for that amount; and
(b) the
amount of the difference between that amount and zero will not be credited to
any liability for land tax under this Act.
(13) Subject to
subsection (14), a beneficiary of a trust may be the designated
beneficiary of the trust for the purposes of this section only if the
beneficiary—
(a) is a
natural person; and
(b) was
a beneficiary of the trust at the prescribed time; and
(c) is
over 18 years of age; and
(d) has
verified by statutory declaration that the beneficiary consents to being the
designated beneficiary of the trust.
(14) Where no
beneficiaries of a trust are over 18 years of age, a notice under this
section may specify that the trustee is to be taken to be the designated
beneficiary (as if the trustee were a beneficiary of the trust) but only if
the trustee is a natural person.
(15) For the purposes
of this section, a reference to a discretionary trust does not include a
public unit trust scheme.
(16) In this
section—
"prescribed time" means midnight on the day on which the Land Tax
(Miscellaneous) Amendment Act 2019 was introduced in the House of
Assembly.