Western Australian Numbered Acts Western Australian Numbered Acts (1) The "unencumbered
value" of property" "is the value of the property determined without regard
to —
(a) any
encumbrance to which the property is subject, whether contingently or
otherwise; or
(b) any
overriding power of revocation or reconveyance; or
(c) any
scheme or arrangement —
(i)
that results in the reduction of the value of the
property; and
(ii)
for which a dominant purpose of any party to the scheme
or arrangement was, in the opinion of the Commissioner, the reduction of the
value of the property.
Note: Example for
paragraph (c) —
A owns land that B
wishes to purchase. The land is valued at $1m. Before the purchase, A grants B
a 50 year lease of the land. B is not required to pay any rent under the
lease. A and B then enter into an agreement for the transfer of the land for
$50 000, being the value of A’s interest in the land taking into
account that it is subject to the lease to B.
The unencumbered value
of the land is determined without regard to the grant of the lease if the
Commissioner is of the opinion there is a scheme or arrangement under which A
or B’s purpose in entering into it was to reduce the value of the land.
(2)
Subsection (1)(c) does not apply to or in respect of a scheme or
arrangement that was entered into before 27 December 1996.
(3) For the purposes
of subsection (1)(c), the Commissioner may have regard to —
(a) the
duration of the scheme or arrangement before the dutiable transaction or the
relevant transaction concerning the property; and
(b)
whether the scheme or arrangement has been entered into with a related person
within the meaning given in section 162; and
(c)
whether there is any commercial efficacy to the making of the scheme or
arrangement other than to reduce duty; and
(d) any
other matters the Commissioner considers relevant.
(4) When determining
the unencumbered value of property —
(a) the
unencumbered value of an undivided share in the property, whether held jointly
or in common, is to be ascertained by multiplying the total unencumbered value
of the property by the share expressed as a fraction; and
(b) in
applying the ordinary principles of valuation —
(i)
it is to be assumed that a hypothetical purchaser would,
when negotiating the price of property, have knowledge of all existing
information relating to the property; and
(ii)
no account is to be taken of any amount that a
hypothetical purchaser would have to expend to reproduce, or otherwise acquire
a permanent right of access to and use of, existing information relating to
property;
and
(c) that
is land —
(i)
if the land is the subject of an agreement to transfer,
any improvement made to the land at the expense of the purchaser or transferee
before the date liability to duty arises on the agreement is to be taken not
to have been made to the land; and
(ii)
if the land is the subject of a transfer, any improvement
made to the land at the expense of the transferee before the land is
transferred is to be taken not to have been made to the land; and
(iii)
having regard to the use of the land that would best
enhance its commercial value; and
(iv)
having regard to commercial advantages (such as goodwill)
that —
(I) attach to the location or other aspects
of the land; and
(II) would affect the
price that a reasonable purchaser would be willing to pay for the land.
Subdivision 4 — Miscellaneous