When is everything a fixture?

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3 November 2011

Six out of eight States and Territories already have expanded their duty base to a “landholder” model for dealings in shares in companies and units in unit trusts. From 1 July 2012, this will extend to seven out of the eight duty jurisdictions. One important aspect of determining whether a duty liability has been triggered and, if so, the quantum of that liability, is to identify the ‘land assets’ of a company or trust.

Historically, there has been a distinction between fixtures and chattels, with only the former being ‘land assets’. However, there have been recent amendments to legislation blurring this distinction and therefore extending the duty base even further to assets that would not ordinarily be fixtures.

The relevant amendments are outlined below. They will affect key industries and assets including, in particular, gas and petroleum pipelines, electricity infrastructure and telecommunications infrastructure.

Tasmania

From assent, the Taxation and Related Legislation (Miscellaneous Amendments) Bill (No. 2) 2011 will extend the meaning of ‘land’ for land-rich duty purposes to include:

  • an interest in a mineral tenement (as defined in the Mineral Resources Development Act 1995) or an interest in a pipeline (as defined in the Gas Pipelines Act 2000);
  • anything under the authority of a mineral tenement that is fixed to land the subject of that mineral tenement, and would be part of that land as a fixture if the mineral tenement were a freehold estate in the land, will be taken to be part of land as a fixture; and
  • an entitlement or interest in a fixture even where the thing fixed to the land is separately owned from the land.

The amendments are a response to the High Court’s decision in TEC Desert Pty Ltd & Anor v Commissioner of State Revenue [2010] HCA 49 (TEC Desert) and reflect the amendments already enacted in the WA Duties Act (see below).  The EM indicates that the amendments are “intended to minimise opportunities for tax avoidance and improve consistency in the duty treatment of land, fixtures and interests transferred by way of shares or directly.”

Queensland

Public Ruling DA167.1.1 was issued on 20 October 2011 and provides that, when determining an entity’s land-holding for landholder duty purposes, the reference to “anything fixed to the land” does not require that the item is a fixture on the land. That is, an item that is fixed to the land will comprise part of an entity’s land-holding irrespective of whether it is a fixture at law.  This interpretation means that anything fixed to the land by more than its own weight will be land for landholder duty purposes.

Western Australia

The definition of ‘land’ in the Duties Act 2008 (WA) was extended by an amending Act on 12 September 2011 to include:

  • an estate or interest in a mining tenement (including for example, a sub-lease or sub-licence of a mining tenement or an equitable interest);
  • anything under the authority of a mineral tenement that is fixed to land the subject of that mineral tenement, and would be part of that land as a fixture if the mineral tenement were a freehold estate in the land; and
  • a pipeline (as defined in the Petroleum Pipelines Act 1969).

Corresponding amendments have been made to the landholder duty provisions to ensure that a landholder or other entity is to be regarded as having an entitlement to land to the extent of its entitlement to anything part of the land as a fixture, even where that fixture is, or purports to be, the subject of an entitlement separate from the ownership of the rest of the land.

These amendments are also a response to TEC Desert and have retrospective effect from 24 December 2010.

South Australia

From 1 July 2011, the definition of ‘land asset’ in the Stamp Duties Act 1923 (SA) includes anything fixed to land, even if not a fixture at law.  In addition, ‘land assets’ include interests owned separately from the land including where ownership of the thing fixed to the land would otherwise be considered legally separate to the land by virtue of: 

  • contract (or other means) (except where the Commissioner is satisfied that the separate ownership is not part of an arrangement to avoid duty); or
  • an Act or law (except where the item is separately owned by an unrelated entity).   

As noted above, this means that anything fixed to the land by more than its own weight will be land for landholder duty purposes.


The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


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