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A Landholder duty is a duty charged on acquisition of indirect intercepts in land through a company or unit trust
1. What is Landholder Duty?
1.1. Landholder duty is payable where a person acquires an interest a Landholder under the Duties Act 2008 (the ‘Act’).
1.2. A Landholder is a corporation or unit trust that holds assets in Western Australia with an unencumbered value of $2 million or more.[1] An entity will also be a Landholder where it is part of an arrangement in which interests in other entities are acquired, which are substantially one arrangement and one other entity is a Landholder or the total value of assets of all the entities in the arrangement are over $2 million.[2]
1.3. A Landholder may also be satisfied where there are a series of linkages or ownership chains aggregating to the requirements of a landholder.
2. How do you know when you are acquiring an interest in a Landholder?
2.1. Landholder duty provisions are charged on the acquisition of indirect interests in land through the acquainting shares in a corporation or units in a unit trust scheme. This does not extend to beneficiaries of a discretionary trust as they do not have any proprietary interest in land held by the discretionary trustee, except where the discretionary trust trustee is part of an ownership claim.
2.2. A ‘unit trust scheme’ refers to a trust in which the beneficial interest in the trust property is divided in the trust instrument into fractions (units), in which all the beneficiaries interests and enforcement rights are ascertainable at any given time.
2.3. The interest of a person in a Landholder is calculated by the greater of that person’s interest in the Landholder if the Landholder were would up, essentially their interest in the equity.
2.4. An interest is acquired when an interest is obtained or increased, such as by purchase, gift, issue, cancellation, redemption abrogation or payment of an amount owing on a share.[3]
2.5. The acquisitions to which Landholder Duty applies include:
(a) As a result of the acquisition, the acquirer receives a significant interest or its significant interest increases,[4] being 50% for an unlisted entity; or
(b) The aggregated group interest (being the aggregated interest of related persons) becomes a significant interest or is a significant interest and increases.[5]
3. Calculating Landholder Duty
3.1. The following persons are jointly and severally liable to pay landholder duty:[6]
(a) The acquirer;
(b) The unit trust trustee or corporation, depending on the circumstances; and
(c) Any related person that has an interest in the landholder after the acquisition.
3.2. Liability to pay duties arises when the acquisition occurs and is due for payment 1 month after the assessment notice is issued.[7]
3.3. Landholder duty is calculated o the value of the interest being acquired in the landholder at the rate of $19,665 + 5.15% of the amount over $500,000.[8]
We are able to provide advice to both individuals and entities in all matters regarding Landholders, including acquisition and disposal.
[1] S155(2) Duties Act 2008. [2] S155(4) Duties Act 2008 [3] S160 Duties Act 2008 [4] S163(1)(a) and (c) Duties Act 2008 [5] S163(1)(b) and (d) Duties Act 2008 [6] S179 Duties Act 2008 [7] S183 and Schedule 2 Duties Act 2008 [8] S184 Duties Act 2008