Publication date: 09 Jan 98 |
Source: THE TAX INSTITUTE
In its search for additional sources of revenue, the NSW Office of State
Revenue is aggressively targeting land held by trusts and utilising legislation
which allows both the trustee and the beneficiaries of a trust to be taxed for the
same patch of dirt, according to Taxation Institute of Australia Tax Technical
Director, Ms Annamaria Carey.
"This form of 'double taxation' is allowed under the Land Tax Management Act
1956 and should sound as a warning to taxpayers who choose to have land
owned by a family trust," said Ms Carey.
"Since the Office of State Revenue's crackdown on land held by trusts began in
November 1997, the Institute has become aware of a number of cases where
the trustee and beneficiaries of a trust have been found liable for tax on the
"In addition to this, taxpayers should also be aware that the Commissioner of
Taxation has the power to reassess earlier years land tax assessments. Where
there has not been a full disclosure of all information the Commissioner can go
back indefinitely and reassess earlier years assessments."
"In this climate of increased compliance in the area of land tax, this 'open
ended' ability should result in substantial additional revenue for the NSW Office
of State Revenue," she said.
Figures released in the NSW Government's recent Annual Report indicate land
tax revenue has increased by 11.5% in the 12 months to December 1997
topping the $640 million mark.
"Land tax appears to be a real money spinner for the NSW Government and
although the percentage of revenue coming from this tax is well below other
revenue sources such as payroll tax and stamp duty, this may change in the
future as the states consider cost effective ways of increasing their revenue,"
Ms Carey said.
"These measures on top of the already highly publicised land tax on principal
residences in excess of $1 million, could make owning land a very expensive
investment for some NSW taxpayers," she said.