|End-of-day quote - 10/27|
Resolute Mining : Standing resolute against the Commissioner of State Revenue
|09/23/2020 | 03:12am|
(1) section 502 of the Duties Act 2001 (Qld) (Duties Act) should first be applied in an effort to ascertain the consideration payable to move the transaction, on which duty will be paid; and
(2) if consideration cannot be ascertained under section 502, duty is payable on the unencumbered value of the relevant property under section 11(7)(b)(ii) of the Duty Act (based on a valuation of the land).
As part of the expansion of the
In accordance with the Mineral Resources Act 1989 (Qld), to obtain the new mining leases Carpentaria entered into a Compensation Agreement with the Department (as landowner), under which the Department provided its consent to the grant of the new mining leases subject to Resolute and the Department entering into a Funding Agreement under which Resolute agreed to pay for the relocation of the school and the construction of a new school at an alternative site.
Under the Funding Agreement, Resolute and the Department agreed that:
(i) the Department will procure the design and construction of a comparable school complex for the
(ii) Resolute will fund the cost of the Project... (at ).
Once the Project was completed and students of the
In the Funding Agreement, Resolute and the Department further agreed that a Funding Amount of approximately
The Commissioner formed the opinion that:
(1) the Funding Amount of approximately
(2) if section 502 of the Duties Act did not apply to make the consideration ascertainable, the common law contingency principle would treat the Funding Amount as a prima facie or basic amount on which duty should be paid.
The result was a duty assessment by the Commissioner of approximately
Section 11(7) of the Duty Act provides
(7) ... the dutiable value of another dutiable transaction is -
(a) the consideration for the dutiable transaction; or
(b) the unencumbered value of the dutiable property or new right the subject of the transaction if -
(i) there is no consideration for the transaction; or
(ii) the consideration can not be ascertained when the liability for transfer duty arises; ...
Section 502 of the Duty Act goes on to provide
(1) Subsection (2) applies for determining the consideration payable under an instrument or transaction if the consideration payable -
(a) may be increased or decreased depending on a particular thing happening or not happening; or
(b) may or may not actually become payable depending on a particular thing happening or not happening;
(2) Regardless of whether the thing happens or does not happen, the consideration is -
(a) if subsection (1)(a) or (b) applies - the highest consideration payable under the instrument or transaction;
In this circumstance, the consideration was not ascertainable at the time of entry into the Funding Agreement. In addition, the Funding Agreement provided for neither a maximum nor minimum amount payable, such that section 502 could not be applied to ascertain the dutiable value of the dutiable transaction under the Funding Agreement.
As the consideration could not be ascertained at the relevant time, section 11(7)(b)(ii) was enlivened.
Qld approach compared to NSW and
In reaching his decision,
In those two states, the revenue authority can issue an interim assessment on the estimated dutiable value of the transaction, and subsequently issue a reassessment when the full dutiable value has been ascertained (section 49 Duties Act 1997 (NSW) and section 30 Duties Act 2000 (Vic)).
However, in the event that consideration cannot be ascertained with the assistance of section 502, the duty is assessed on the unencumbered value of the land being transferred.
A copy of
Special thanks to
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