Western Australian Numbered Acts

DUTIES ACT 2008 (NO. 11 OF 2008) - SECT 173

173 .         Reversal of exemption where certain changes made to discretionary trust

        (1)         This section applies if —

            (a)         an acquisition from a person (the "transferor") of an interest in a corporation by the trustee of a discretionary trust was —

                  (i)         exempt under section 171; or

                  (ii)         a partially exempt acquisition under section 172;

                and

            (b)         after the acquisition occurs there is a material alteration to the operation of the discretionary trust; and

            (c)         at the time of the material alteration —

                  (i)         the corporation is a landholder; and

                  (ii)         the corporation or a linked entity in respect of the corporation, is using solely or dominantly in the business of primary production any of the land to which it was entitled when the acquisition occurred.

        (2)         There is a material alteration to the operation of the discretionary trust, as mentioned in subsection (1)(b), if —

            (a)         during the lifetime of the transferor, a person that is not a family member of the transferor —

                  (i)         becomes entitled to a share or interest in the trust, whether that share or interest is vested or contingent; or

                  (ii)         otherwise benefits from the trust;

                or

            (b)         the transferor gains control of the trust.

        (3)         For the purposes of subsection (2) —

            (a)         the reference to a family member is to a person who is a family member within the meaning given in section 100; and

            (b)         the matter in paragraph (b) is to be determined in accordance with section 99(2).

        (4)         On the occurrence of a material alteration to the operation of the discretionary trust —

            (a)         an acquisition of an interest in the corporation by the trustee of the trust is taken to have occurred; and

            (b)         that interest is taken to be an interest of the same percentage as that mentioned in subsection (1)(a); and

            (c)         the acquisition is taken to have occurred at the time when the material alteration occurred.

        (5)         If the acquisition mentioned in subsection (1)(a) was a partially exempt acquisition under section 172 the amount of duty payable in respect of the acquisition that is taken to have occurred under subsection (4) is to be reduced by the amount of the duty paid in respect of the partially exempt acquisition.