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Wednesday, 26 November 1941

Mr LAZZARINI (Werriwa) (Minister assisting the Treasurer) . - I move -

That the following sub-clause be added to the clause: - " (2.) Notwithstanding anything contained in the last preceding sub-section, where the disponor's interest is by way of mortgage or charge and the mortgage or charge is wholly or partly satisfied by payment within five years of the making of the disposition, the Commissioner shall treat that payment as part of the consideration for the disposition and shall re-assess the gift duty payable and make any refund which is necessary in consequence of the re-assessment.".

Clause 16 provides that where, in any disposition of property by any person connected with him. by ties of blood or marriage and the disponor retains any interest in that property or acquires any interest in. any other property by way of mortgage, annuity, contract for the benefit of the disponor, power of revocation or other disposition or other similar interest, no deduction shall be made therefor in determining whether the disposition is a gift or in computing the value of such gift. Frequently, the head of a family will distribute real property owned by him amongst the members of the family for consideration which purports to be fully adequate but which is paid in the form of merely nominal deposits, and the balance is secured by mortgage to the head of the family on such terms and conditions as leave the recipients of the property without any real obligations to their father and which involve no intention of the money secured by the mortgage ever having to be. paid. The transactions, in fact, represent absolute gifts, camouflaged by colourable arrangements which it is never intended shall be fulfilled. But for the provisions of section 16, these gifts would entirely escape the provisions of the bill.

Although the clause is designed to cover colourable transactions it will also, in the form in which it is printed, render liable genuine transactions, as it is impossible to distinguish between the colourable and the genuine. The purpose of the amendment is to afford relief to these genuine transactions by inserting in the bill a provision that where the disponee pays any amounts to the dis.ponor in reduction of the mortgage within five years of the disposition such amounts will be taken into account by the commissioner who will re-assess the duty and refund the amount of duty applicable to such payment.

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