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Absentee corporation

An absentee corporation is a corporation that is incorporated outside of Australia, or a corporation in which other absentee natural persons, absentee corporations or absentee trusts (or a combination thereof) have a controlling interest.

Absentee corporations

Absentee individual

An absentee individual is any individual who:

  1. Is not an Australian citizen or permanent resident,
  2. Does not ordinarily reside in Australia, and
  3. Was absent from Australia:
  • on 31 December of the year prior to the tax year, or
  • for more than six months in total in the calendar year prior to the tax year

Absentee individuals

Absentee joint owner

A member of a joint ownership who is an absentee individual, absentee corporation or absentee trust.

The absentee owner surcharge will be applied to any individual land tax assessment received by the absentee owner.

The joint ownership will also be liable for the absentee owner surcharge if all of the joint owners are absentee owners.

Absentee joint ownership

Absentee joint ownership

The absentee owner surcharge will be applied to a joint ownership assessment if all of the joint owners are absentee owners. This may be a combination of absentee individuals, absentee corporations and absentee trusts.

If only some of the joint owners are absentee owners, the absentee owner surcharge will be applied to the individual land tax assessments of the joint owners.

A joint owner who is not an absentee owner will not be subject to the surcharge.

Absentee joint ownership

Absentee trust

An absentee trust is a trust that has at least one beneficiary, unit holder or beneficial owner that is an absentee natural person, absentee trust or absentee corporation.

Absentee trusts

Administration trust

An administration trust is created upon the death of a land holder to allow the deceased estate to be administered.

Deceased estates

Australian citizen

A person who has been acknowledged by the Australian government as a citizen of Australia.

Australian corporation

A corporation that has been incorporated, or formed into a legal corporation, within Australia.

Beneficial owner

Beneficiaries of a fixed trust.

Land tax and trusts

Controlling interest

An absentee person has a controlling interest where they either alone, or acting together with another absentee person:

  • Hold more than 50 per cent of the shares in the absentee corporation,
  • Can control the composition of the board of the corporation, or
  • Can cast more than 50 per cent of the maximum number of votes at the corporation’s general meeting

The absentee person with a controlling interest can be an absentee corporation, a trustee of an absentee trust or an absentee individual.

Absentee corporations

Corporation

A corporation is a company, body corporate or unincorporated body registered under the Corporations Act (2001).

Discretionary trust

A discretionary trust is a trust under which the vesting of the whole or any part of the trust property:

  • Is required to be determined by a person either in respect of identity of the beneficiaries or the quantum of interest to be taken, or both, or
  • Will occur in the event that a discretion conferred under the trust is not exercised

A discretionary trust generally does not include an excluded trust, a fixed trust or a trust to which a unit trust scheme relates.

Absentee discretionary trusts

Excluded trust

A trust may qualify as an excluded trust if it is a:

  • Charitable trust,
  • Concessional trust (i.e. a trust of which each beneficiary is a person with a disability within the meaning of the Disability Act 2006 or a person in respect of whom a guardianship order is in force under the Guardian and Administration Act 1986),
  • Public unit trust scheme (e.g. listed trust),
  • Wholesale unit trust scheme (registered under Division 7, Part 2, Chapter 3 of the Duties Act 2000),
  • Trust of which one or more of the beneficiaries is a club as referred to in s73 of the Duties Act 2000 or a member of such a club, or
  • Complying superannuation trust (including approved deposit fund and pooled superannuation trust)

Excluded trusts

Fixed trust

A fixed trust is any trust that is not an excluded trust, a discretionary trust or a trust to which a unit trust scheme relates.

The beneficiaries of a fixed trust usually cannot be changed. The proportion of a beneficiary’s interest cannot be varied.

Absentee fixed trusts

Individual

An individual is a natural person, not an artificial entity such as a company or trust.

Joint ownership

If you own land with others, you are considered to be a joint owner of that land.

Joint ownerships can include individuals, companies or trusts together.

Each unique combination of owners is considered a different joint ownership and is a separate customer for land tax purposes.

Joint ownerships can be liable for land tax and will receive a joint ownership assessment. Joint owners may be individually liable for their share of jointly owned land.

Joint ownership

Land tax assessment

An owner of land is assessable for land tax if they receive a land tax assessment each year, or the taxable value of land that they hold, excluding exempt properties land exceeds $250,000 (or $25,000 for trusts).

Land tax

Ordinarily reside in Australia

If you ordinarily reside in Australia, there is an element of permanence about where you live, compared to somewhere you might casually or intermittently stay.

We will consider a number of factors in deciding if you ordinarily reside in Australia, including:

  • The period of your physical presence in Australia – a longer period indicates that a person has established a settled residence in Australia,
  • Your intention or purpose for being in Australia – employment or education is an indicator of your intention to live in Australia,
  • Family and business/employment ties – family members living in Australia,
  • Maintenance and location of assets – bank accounts kept in Australia, and
  • Social and living arrangements – being a member of local sporting club, church group, volunteer association.

Absentee individuals

Owner

Generally you own land if you have an interest in the title for that land either on your own or with other individuals, companies or trusts. You may also be considered an owner of land in you are a life tenant or have a lease or licence from the Crown.

Land tax

Permanent resident of Australia

An Australian permanent resident is a non-citizen who is the holder of a permanent visa. A permanent resident can live, work and study without restriction in Australia. This includes New Zealand citizens with a Special Category Visa (subclass 444).

Specified beneficiary

A specified beneficiary is a beneficiary of the trust who may receive income or property from the trust and is specifically named in the trust deed that establishes the discretionary trust. The focus is on the status of the specified beneficiaries, not the nominated beneficiary.

Land tax and trusts

Trust

Land can be held by an entity for the benefit of another. This is called a trust.

If land is held in a trust, the trustee legally owns the land (i.e. the trustee’s name will be on the certificate of title for the land) and the beneficiary owns the land beneficially (i.e. the trust legally holds the property for the benefit of the beneficiary).

Examples include discretionary trust, fixed trust, unit trust administration trust and superannuation trust.

Land tax and trusts

Trustee

A trustee is an entity who holds and manages land on behalf of beneficiaries of a trust.

trustee legally owns the land (i.e. the trustee’s name will be on the certificate of title for the land) and holds it in trust for the benefit of the beneficiaries of the trust.

Trustees may include executors, administrators or guardians.

Land tax and trusts

Unit holder

An individual, corporation or trust who owns one or more units in a unit trust.

Unit trusts

Unit trust

A unit trust is an arrangement made for the purpose of providing facilities for participation by a person, as a beneficiary under a trust, in any profit or income arising from the acquisition, holding, management or disposal of property under the trust.

Absentee unit trusts