Hiya Gordon
Yes, it does appear to be good news indeed.
Here is the Media Release in full:
FROM THE OFFICE OF THE TREASURER
DATE: Friday, October 21, 2005
NEW ARRANGEMENTS FOR TAXATION ON TRUSTS
New arrangements for the taxation of land held in trusts will begin on January 1, the Treasurer, John Brumby, said today.
Mr Brumby said the Government had consulted widely on legislation to be introduced to parliament next week and the changes would affect only a small number of taxpayers, estimated to be less than 2000.
“We have spoken to key groups, including the Property Council, to finalise this new model,” Mr Brumby said. “Existing trusts will have the option to be taxed at present rates by nominating a beneficiary.
“The new arrangements are revenue neutral in the first year, rising to $2 million in the second, and is estimated to bring in around $6 million by the end of the fourth year.
“This compares with the revenue gains of up to $20 million proposed in the original model released for discussion in July.”
Mr Brumby said the Government believed the new arrangements would ensure greater clarity, as well as providing a simpler, fairer, and more equitable tax system.
“The Government was concerned some people had been able to gain an unfair advantage over other land tax payers by separating their land holdings and minimizing their total tax,” he said.
“The Government believes the new model will address this issue and make it fairer for all. These trust provisions have remained unchanged since 1910.”
Mr Brumby said the new arrangements would see a surcharge of 0.375 per cent payable for existing trusts if a beneficiary was not nominated, in addition to the standard land tax scale.
He said all new trusts would be subject to the new provisions but there would be exemptions from the surcharge for many types of trusts.
Mr Brumby said Victoria continued to have competitive land tax rates with land held in trusts valued between $305,000 and $2.9 million paying lower tax than New South Wales and Queensland.
Mr Brumby said the Property Council had recently written to him saying the current system was complex, created uncertainty for industry and was long overdue for reform.
“The Government believes the new model clarifies outstanding issues on trusts and reflects the concerns of affected groups and individuals,” he said.
An exemption from the surcharge will be available for the following types of trusts:
•Charitable trusts;
•Complying superannuation funds;
•Trusts established under a will, for a period of three years;
•Public unit trusts & wholesale unit trusts;
•Trusts established solely for disabled beneficiaries;
•Trusts established solely for beneficiaries of a guardianship or administration order;
•Child maintenance trusts and
•Trusts holding land for members of a club.
Mr Brumby said the combination of wide ranging exemptions plus the ‘nominated beneficiary’ option meant the vast majority of family trusts would be unaffected by the new model.
“Only taxpayers who choose not to nominate a beneficiary will pay the surcharge,” he said.
The rates in the new legislation are:
Total Unimproved Value Special Trusts Rate
$0 - $19,999 Nil
$20,000 - $199,999 $75 + 0.375% value over $20,000
$200,000 - $539,999 $950 + 0.575% value over $200,000
$540,000 - $899,999 $2,905 + 0.875% value over $540,000
$900,000 - $1,189,999 $6,055 + 1.375% value over $900,000
$1,190,000 - $1,619,999 $10,043 + 1.875% value over $1,190,000
$1,620,000 - $2,699,999 $18,105 + 2.585% value over $1,620,000*
$2,700,000 and over $36,330 + 3.5% value over $2,700,000
* Total surcharge tapers from a maximum of $6 075 at $1.62m to zero at $2.7m
and thanks JamesGG
