Western Australian Current Acts Western Australian Current Acts (1) A reference in
this section to a transfer of corporation or unit trust scheme property is to
a transfer, or agreement for the transfer, of property (some or all of which
is dutiable property) by —
(a) the
liquidator of the corporation to any of its shareholders in the course of a
distribution of its assets as a consequence of the winding up of the
corporation; or
(b) the
trustee of a unit trust scheme to any unit holder in the scheme in the course
of the winding up of the unit trust scheme.
(2) The dutiable value
of a dutiable transaction that is a transfer of corporation or unit trust
scheme property is —
(a) in
relation to a corporation — determined in accordance with the following
formula —
where —
DV is the dutiable
value;
A is the greater of
the following amounts —
(i)
the amount (if any) by which the value, when the winding
up begins, of all the assets distributed, or to be distributed, to the
shareholder exceeds the value, at that time, of the shareholder’s
entitlement to the net assets of the corporation; or
(ii)
the amount that is the total of —
(I) the amount (if any) owing to the
shareholder that the shareholder has released the corporation from paying in
the relevant period; and
(II) the amount (if
any) of any liability that the shareholder, or a person related to the
shareholder, has assumed or discharged on behalf of the corporation in the
relevant period;
X is the unencumbered
value of all dutiable property the subject of the transfer;
Y is the unencumbered
value of all property the subject of the transfer;
and
(b) in
relation to a unit trust scheme — determined in accordance with the
following formula —
where —
DV is the dutiable
value;
A is the greater of
the following amounts —
(i)
the amount (if any) by which the value, when the winding
up begins, of all the assets distributed, or to be distributed, to the unit
holder exceeds the value, at that time, of the unit holder’s entitlement
to the net assets held by the trustee of the unit trust scheme as trustee of
that trust; or
(ii)
the amount that is the total of —
(I) the amount (if any) owing to the unit
holder that the unit holder has released the trustee of the unit trust scheme
from paying in the relevant period; and
(II) the amount (if
any) of any liability that the unit holder, or a person related to the unit
holder, has assumed or discharged on behalf of the trustee of the unit trust
scheme in the relevant period;
X is the unencumbered
value of all dutiable property the subject of the transfer;
Y is the unencumbered
value of all property the subject of the transfer.
Note for this subsection:
For example, Company X
has 2 equal shareholders A and B. The company has total assets of $800 000,
total liabilities of $100 000 and net assets of $700 000. The shareholder
entitlement of each of A and B is $350 000.
There are no liquid
assets to satisfy the liability and the liquidator distributes the assets
subject to the liability. A receives assets of $450 000 ($100 000 in excess of
A’s entitlement) comprising $400 000 of dutiable property and $50 000
non-dutiable property and assumes the whole mortgage. B receives assets
comprising dutiable property of $350 000.
A’s duty
assessment:
$100 000 (excess
entitlement) x $400 000 (value of dutiable property)
$450 000 (value of all property received)
Transfer duty is
charged on $88 888.
B’s duty
assessment:
Nominal duty is
charged, as B has received a distribution of assets equal to the shareholder
entitlement.
(3) In subsection (2)
—
person related , to a shareholder or unit holder,
means that the person and the shareholder or unit holder are related persons
within the meaning of section 162(1)(a) to (g);
relevant period means the period beginning on the
day that is 12 months before the day on which the winding up begins and ending
on the day that the property is transferred.
(4A) For the purposes
of paragraph (a)(ii)(II) or (b)(ii)(II) of the definition of the variable
“A” in subsection (2), the Commissioner may exclude part or all of
the amount of any liability that a person related to a shareholder or unit
holder, as the case requires, has assumed or discharged if the Commissioner is
satisfied that it is appropriate to do so having regard to the application of
subsection (2) to all other transfers of corporation or unit trust scheme
property in respect of the same corporation or unit trust scheme.
(4) Subject to
subsection (2), nominal duty is chargeable on a dutiable transaction that is a
transfer of corporation or unit trust scheme property if —
(a) in
relation to a transfer of corporation property — the total value of the
transaction to the shareholder, when the winding up begins, is equal to or
less than the value of the shareholder’s entitlement to the net assets
of the corporation at that time; or
(b) in
relation to a transfer of unit trust scheme property — the total value
of the transaction to the unit holder, when the winding up begins, is equal to
or less than the value of the unit holder’s entitlement to the net
assets held in the unit trust scheme at that time.
(5) This section does
not apply to a transfer of corporation or unit trust scheme property if the
Commissioner is satisfied that the corporation or unit trust scheme is being
wound up as a scheme or arrangement, or part of a scheme or arrangement, for
which a dominant purpose of any party was the reduction of the duty otherwise
chargeable on the transaction.
(6) In considering
whether or not the Commissioner is satisfied for the purposes of subsection
(5), the Commissioner may have regard to any of the following in relation to a
corporation —
(a) the
duration of the shareholder’s shareholding in the corporation;
(b)
whether or not the shareholder held shares in a related corporation of the
corporation that owned the property before it was owned by the corporation;
(c) the
period for which the property has been owned by the corporation or a related
corporation of the corporation;
(d) any
dealing in shares of the corporation or a related corporation of the
corporation by any one or more of the following —
(i)
the shareholder;
(ii)
a previous owner of the property;
(e)
whether there is any commercial efficacy to a scheme or arrangement of
transactions involving any one or more of the following —
(i)
the corporation;
(ii)
the shareholder;
(iii)
a related corporation of the corporation;
(iv)
a person that has a substantial holding (within the
meaning given in the Corporations Act) in a person referred to in subparagraph
(i), (ii) or (iii),
in relation to the
winding up, other than to reduce the duty otherwise chargeable on the
transfer;
(f)
whether the transfer is pursuant to a right, attaching to any of the shares in
the corporation, to select or receive any particular property of the
corporation;
(g) any
other matters the Commissioner considers relevant.
(7) In considering
whether or not the Commissioner is satisfied for the purposes of subsection
(5), the Commissioner may have regard to any of the following in relation to a
unit trust scheme —
(a) the
duration of the unit holder’s unit holding in the unit trust scheme;
(b)
whether or not the unit holder held units in a related unit trust scheme that
owned the property before it was owned by the trustee of the unit trust
scheme;
(c) the
period for which the property has been owned by the trustee of the unit trust
scheme or a related unit trust scheme of the unit trust scheme;
(d) any
dealing in units of the unit trust scheme or a related unit trust scheme of
the unit trust scheme by any one or more of the following —
(i)
the unit holder;
(ii)
a previous owner of the property;
(e)
whether there is any commercial efficacy to a scheme or arrangement of
transactions involving any one or more of the following —
(i)
the trustee of the unit trust scheme;
(ii)
the unit holder;
(iii)
a related unit trust scheme,
in relation to the
winding up, other than to reduce the duty otherwise chargeable on the
transfer;
(f)
whether the transfer is pursuant to a right, attaching to any of the units in
the unit trust scheme, to select or receive any particular property held by
the trustee of the unit trust scheme as trustee of that trust;
(g) any
other matters the Commissioner considers relevant.
(8) For the purposes
of subsection (7), unit trust schemes are related if a unit trust holder in
one unit trust scheme holds units that provides the holder to an entitlement
to the capital of another unit trust scheme if it were to be wound up.
[Section 29 2 amended: No. 29 of 2012 s. 4.]