Budget Revenue Measures

2008-09 – Part 1

Lisa Baker

The information provided in this presentation is

based upon the Revenue Law Reform (Budget

Initiatives) Bill 2008, which was introduced in the

Legislative Assembly on 7 May 2008 as part of

the 2008-09 Budget

The intention of this presentation is to provide an

overview of the measures included in the Bill,

rather than be a platform for policy debate

Budget Revenue Measures

Revenue Law Reform (Budget Initiatives) Bill

Conveyance stamp duty rates reduction

Other stamp duty changes

Home incentive scheme changes

Consequential amendments resulting from the introduction of the Taxation Administration Act

Overview

Conveyance stamp duty rates reduction

From 6 May 2008

New minimum rate 1.5% (from 2.1%)

New maximum rate 4.95% (from 5.4%)

Maximum rate will apply at $525 000 (previously $500 000)

Stamp duty first home owner concession on first $385 000 of a property’s value

Conveyance on Stamp Duty

Nominal $20 deed duty removed, other than where the deed relates to a trust

Remains for deeds that constitute, vary, deal with interests or entitlements or extinguishes a trust

Other Stamp Duty Changes

Exploration licences and exploration retention licences will be “land” for purpose of stamp duty

Direct conveyances and land holder acquisitions

Transitional provisions

Concession will be provided when conveyed pursuant to a “farm-in agreement”

Other Stamp Duty Changes

“Farm-in agreement”

What is a farm-in agreement?

Dutiable value of an interest in an exploration licence acquired pursuant to a farm-in agreement

Transitional provisions

Other Stamp Duty Changes

Ensure stamp duty is required to be paid on the transfer of a mining tenement before it is entered in a mining register

Other Stamp Duty Changes

Interest rate applied to a first home owner

grant debt aligned with the interest rate

provided in the Taxation Administration Act

Time in which to commence a prosecution

under the First Home Owner Grant Act

increased to 5 years

Home Incentive Scheme Changes

Misleading information provision under the First Home Owner Grant Act redrafted to ensure that it is an offence where misleading information is provided

Defence aligned with that in the Taxation Administration Act

Home Incentive Scheme Changes

Clarify joint and several liability of group members

Reinstate that the stamp duty exemption on the conveyance of property from a trustee of a non-discretionary trust to a beneficiary is only available where no valuable consideration is given

Consequential Amendments

Clarify when the TRO can provide revenue-related information

Allow the Commissioner to excuse a conveyee from the residence requirements provided there are special reasons to do so

Only applies where are two or more conveyees and at least one conveyee will fulfil the requirements

Consequential Amendments

Minor consequential amendments to update obsolete references as a result of the introduction of the new Taxation Administration Act

Consequential Amendments

Stamp duty rates reduction

Exploration licences ‘land’

Abolition of nominal deed duty (except for trusts)

Home ownership incentive schemes alignments

Consequential amendments

Summary

For more information see:

RC-GEN-008: 2008-09 Budget Amendments

or www.revenue.nt.gov.au

More information

www.nt.gov.au

Budget Revenue Measures

2008-09 – Part 2

Kevin Phang

The information in this presentation is

based upon the Pay-roll Tax Amendment

(Harmonisation) Bill 2008

The presentation outlines measures

in the Bill

It is not a platform for policy debate

Payroll Tax Measures

Pay-roll Tax Amendment (Harmonisation) Bill

Rate reduction

Harmonisation measures

Effective 1 July 2008

Overview

Payroll tax rate reduction

Rate currently 6.2%

Rate to reduce to 5.9%

From 1 July 2008

Rate Reduction

Lodgement and payment dates Motor vehicle allowances Accommodation allowances Fringe benefits Superannuation Work performed in another country Employee share schemes Grouping

National Project – Eight Areas

Exemption based on ATO rate

2008-09 rate is 70 cents per business km

Amounts above exempt component remain taxable

Motor Vehicle Allowances

Exemption based on ATO rate

2008/09 rate about $200 per day

Amounts above exempt component remain taxable

Accommodation Allowances

Currently taxed on the full value

From 1 July 2008, taxed as a fringe benefit

Concessional FBT value

Living Away From Home Allowances

Wages paid in NT for services performed in

another country >6 months fully exempt

Includes first 6 months

Previously tax on the first 6 months wages

Work Performed in Another Country

New rules for taxing shares and options

Shares/options liable on the relevant day

when share/option granted to employee; or

when share/option vests with the employee (employer can choose the day)

Employee Share Acquisition Schemes

Refund available where tax paid on grant of share/option and the grant is rescinded

New nexus rules

NT registered/incorporated company; or

Services performed wholly in the NT

Grant of a unit in a unit trust scheme to be taxed as a fringe benefit

Employee Share Acquisition Schemes

Parent and subsidiary corporations

Inter-use of employees

Controlling interests (more than 50%)

Directors

Shareholdings

Partnership entitlements

Entitlement of beneficiaries

Grouping

Definition of “business” aligned Common test for grouping by inter-use of

employees Common test for determining controlling

interests directors

shareholdings

partnership entitlements

entitlement of beneficiaries Tracing of interests in corporations

Grouping

Excluding a person from a group

discretion broadened

inter-use of employees

common directors, shareholdings

partner or beneficiary entitlements

Exception for related corporations remains

Grouping

Entity grouped with a corporation in which the entity has a controlling interest

Entity = person or associated persons

Direct interest – based on voting power

Indirect interest

Aggregate interest

Grouping – Tracing Provisions

Entity = person or set of associated persons

Associated persons includes

direct family members

corporations which family has a majority shareholding

related corporations

Grouping – Tracing Provisions

Direct interest – where an entity can exercise voting power of shares

Indirect interest – where an entity is linked to Corp B by the entity’s direct interest in Corp A

Corp A has a direct or indirect interest in Corp B

Grouping – Tracing Provisions

Entity has 80% in Corp A

Corp A has 70% in Corp B

Entity has a direct interest in Corp A

Corp A has a direct interest in Corp B

Entity has an indirect interest in Corp B

Value of indirect interest = 80% x 70%= 56%

Grouping – Tracing Provisions

Aggregate interest exists where an entity has:

A direct and indirect interest in a Corp; or

Two or more indirect interests in a Corp

Aggregate interest is the sum of the entity’s direct and indirect interests in the Corp

Grouping – Tracing Provisions

Entity has 25% in Corp A

Entity has 40% in Corp B

Corp A has 50% in Corp B

Entity has indirect interest in Corp B

25% x 50% = 12.5%

Entity’s aggregate interest in Corp B = 12.5% + 40%

= 52.5%

Grouping – Tracing Provisions

Commonwealth amended its superannuation legislation

Now known as ‘employment termination payments’

Termination Payments

Rate reduction

Harmonisation

Allowances

Work performed in another country

Employee share schemes

Grouping including tracing

ETPs

Summary

For more information see:

RC-PRT-001: 2008-09 Payroll Tax Changes

or www.revenue.nt.gov.au

More information

www.nt.gov.au