Acquisitions of shares or units in land rich entities
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Start
Landholder
Interest
Significant interest
Conclusion - liable
Not liable
Exempt transaction
Concessions
Where a private company, private unit trust scheme or wholesale unit trust scheme holds land in NSW, an acquisition of shares or units in the private company or trust may attract duty at the general rate as if it were an acquisition of the land held by the company or trust.
A liability at the general rate arises whenever a person or persons make a relevant acquisition in a land rich landholder.
When a relevant acquisition is made, the person or persons acquiring the interest must complete an Acquisition Statement and submit it to the Office of State Revenue for assessment of duty.
Duty is calculated on both the current acquisition and any other acquisitions made by the person or any associated person in the preceding three years.
Exemptions or concessions may apply to certain types of acquisitions.
Land rich landholder
A private company, private unit trust scheme or wholesale unit trust scheme is a land rich landholder if:
it has landholdings in NSW with an unencumbered value of $2 000 000 or more, and
its landholdings in all places, whether within or outside Australia, comprise 60% or more of the unencumbered value of all its property.
Relevant acquisition
A relevant acquisition is made when a person or persons acquire an interest in a land rich landholder:
that is of itself a significant interest, or
that, when combined with other specified interests of the person or any associated person, results in a significant interest, or
that increases an existing significant interest.
Interest
A person has an interest in a landholder if the person has an entitlement (other than as a creditor or other person to whom the landholder is liable) to a distribution of property from the landholder on a winding up of the landholder or otherwise.
Significant interest
A person who holds an interest in a landholder is considered to have a significant interest if, in the event of a distribution of all the property of the landholder
in the case of a private unit trust scheme: the person is entitled to a distribution of 20% or more of the property of the trust, or
in the case of a private company or wholesale unit trust scheme: the person is entitled to a distribution of 50% or more of the property of the company or trust.
