In case you missed it at the 2024 Property & Commercial Law Conference this year, Ron Jorgensen’s tax updates covered some key developments, essential for ensuring compliance and leveraging new opportunities in tax planning.
Key Takeaways
- Property Transfer Duty: Updated guidelines on property valuations for non-market transactions.
- Trust Variations: Public Ruling clarifying when trust amendments constitute a declaration of trust and the SRO’s approach to imposing duty on a declaration of trust or a change of beneficial ownership arising from a variation of a trust instrument.
- Intergenerational Rural Transfer Exemption: Revised rules affecting discretionary trusts and transfer eligibility (see further below).
- Payroll Tax: Updated criteria and examples for excluding designated contractors from payroll tax obligations.
- Home Grants: New administrative penalties for non-compliance with HomeBuilder and First Home Owner Grant conditions.
- Life Insurance Riders: New separate tax on additional insurance coverage (riders) that are added to life insurance policies, but only if these additional coverages are not directly related to the main life insurance policy. Applies specifically to temporary and term life insurance plans.
- Foreign Investor Land Tax: Relief for deceased estates of Australian citizens extended for 24 months.
For detailed information, see here.
In particular, we wanted to highlight the Intergenerational Rural Transfer Exemption Update:
The recent update to the Intergenerational Rural Transfer Exemption in Tasmania clarifies that discretionary trusts will no longer qualify for the exemption if the trustee has the discretion to remove beneficiaries. The exemption is only applicable if the beneficiaries are relatives of the transferor and cannot be varied except by adding named relatives. This change aims to prevent schemes to evade duty but has stirred controversy for its restrictive interpretation.
Lawyers should ensure that any new or existing special purpose intergenerational trust deeds explicitly prohibit changing beneficiaries to maintain eligibility for the exemption.
Further, in respect of old special purpose intergenerational trust deeds, those trusts should not receive the transfer of any further rural land unless they are amended to remove those powers.
Published – 24 July 2024