Budget Revenue Measures 2008-09 – Part 1 Lisa Baker

1. Budget Revenue Measures 2008-09 – Part 1 Lisa Baker

2. 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

3. 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

4. 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

5. 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

6. 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

7. “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

8. 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

9. 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

10. 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

11. 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

12. 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

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

14. Stamp duty rates reduction Exploration licences ‘land’ Abolition of nominal deed duty (except for trusts) Home ownership incentive schemes alignments Consequential amendments Summary

15. For more information see: RC-GEN-008: 2008-09 Budget Amendments or www.revenue.nt.gov.au More information

16. www.nt.gov.au

17. Budget Revenue Measures 2008-09 – Part 2 Kevin Phang

18. 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

19. Pay-roll Tax Amendment (Harmonisation) Bill Rate reduction Harmonisation measures Effective 1 July 2008 Overview

20. Payroll tax rate reduction Rate currently 6.2% Rate to reduce to 5.9% From 1 July 2008 Rate Reduction

21. 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

22. Exemption based on ATO rate 2008-09 rate is 70 cents per business km Amounts above exempt component remain taxable Motor Vehicle Allowances

23. Exemption based on ATO rate 2008/09 rate about $200 per day Amounts above exempt component remain taxable Accommodation Allowances

24. Currently taxed on the full value From 1 July 2008, taxed as a fringe benefit Concessional FBT value Living Away From Home Allowances

25. 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

26. 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

27. 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

28. Parent and subsidiary corporations Inter-use of employees Controlling interests (more than 50%) Directors Shareholdings Partnership entitlements Entitlement of beneficiaries Grouping

29. 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

30. 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

31. 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

32. 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

33. 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

34. 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

35. 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

36. 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

37. Commonwealth amended its superannuation legislation Now known as ‘employment termination payments’ Termination Payments

38. Rate reduction Harmonisation Allowances Work performed in another country Employee share schemes Grouping including tracing ETPs Summary

39. For more information see: RC-PRT-001: 2008-09 Payroll Tax Changes or www.revenue.nt.gov.au More information

40. www.nt.gov.au