Miscellaneous Taxation Ruling

MT 2020

ACT Stamp Duty : whether a collateral loan security is subject to duty where the primary loan security was executed before 1 January 1986

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FOI status:

PREAMBLE

A.C.T Stamp Duty is imposed on loan security instruments that are "connected with the Territory" - that is, they either subject property in the A.C.T to a security or are executed in the A.C.T by the borrower. The duty does not apply to loan security instruments executed before 1 January 1986.

2. The question has been asked whether a loan security connected with the Territory, and executed on or after 1 January 1986, is liable to A.C.T Stamp Duty where -

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it is a collateral security for the same money as is secured by a primary loan security that is also connected with the Territory; and

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the primary loan security is not dutiable because it was executed before 1 January 1986.

3. As a general rule, where a loan security is a collateral security for the same money as is secured by a primary loan security, sub-section 58P(1) of the Australian Capital Territory Taxation (Administration) Act 1969 (the Act) provides that, with one exception, the collateral security is not liable to duty. The exception, which is set out in sub-section 58P(2) of the Act, applies in a case where both the primary and collateral loan securities are connected with the Territory, both secure the same money and neither the primary loan security nor any other collateral security securing the same money has been duly stamped in accordance with the Act. In that case, the collateral security is liable to an amount of duty (if any) equal to the duty that would be payable on the collateral security if it were the primary loan security and the primary loan security had been executed when the collateral security was executed.

RULING

4. Where both a primary and a collateral loan security are connected with the Territory and secure the same money, the collateral security is liable to A.C.T Stamp Duty if the primary loan security (or any other collateral security for the same money as is secured by the primary loan security) has not been duly stamped in accordance with the Act. The collateral security is liable for duty notwithstanding that the primary loan security has not been stamped because it was executed prior to 1 January 1986.

COMMISSIONER OF TAXATION
30 July 1986

References

ATO references:
NO 86/2748-7
BO ACT 011/A90

Date of effect:
Immediate

Date original memo issued:
28 May 1986

Subject References:
ACT STAMP DUTY
LOAN SECURITIES
COLLATERAL SECURITIES

Legislative References:
AUSTRALIAN CAPITAL TERRITORY TAXATION (ADMINISTRATION) ACT 1969 58P