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Restricted “Work” Licence

By Sarah Camm

The countdown to Christmas is filled with many wonderful events, Christmas parties, family barbecues, and other opportunities to have a few cold drinks in the amazing weather Brisbane has to offer this time of year. It is important that employers and employees plan how to get home from the office Christmas party, and where possible arrangements are made to stay over at your mate’s house rather than driving home. But mistakes happen, and sometimes those mistakes can mean you are facing an extended period without a drivers’ licence.

If you need your drivers’ licence for work, you may be eligible to apply for a restricted licence under section 87 of the Transport Operations (Road Use Management) Act 1995 (Qld) (“TORUM ACT”).

There are a couple of important things to note regarding applying for a restricted licence:

  • you must apply for it, it will not be automatically granted
  • evidence in the form of an affidavit will be required from you, your employer and sometimes other family members setting out your circumstances
  • the application must be made and heard when you are disqualified, that is, when you are sentenced for the offence
  • the court will impose the conditions it sees fit when granting the restricted licence, and you must not drive a vehicle for other purposes or other than in accordance with the court’s orders
  • the court will take the granting of a restricted licence into account when sentencing you for the offence, which may result in a longer period of disqualification

To be eligible for a restricted licence you must satisfy the following criteria:

  • you must be charged with, and convicted of, one of the following offences:
    • drink driving, with a blood alcohol concentration (“BAC”) reading of less than 0.15
    • driving with a relevant drug in your blood or saliva
    • failure to provide a specimen of breath or saliva at the roadside (but not at the police station)
  • as a consequence of the conviction, you will be disqualified from driving
  • the court must consider you are a fit and proper person to hold a restricted licence, having regard to the safety of other road users and the public generally
  • extreme hardship would be caused to you or your family because you would be unable to earn an income. General hardship, such as an inability to take children to school or medical appointments will not satisfy this criteria, even if you are the only member of your family who drives.

You will be ineligible for a restricted licence if:

  • this will be your second conviction for a similar offence, or you have previously had your licence cancelled or suspended, in less than 5 years;
  • your BAC reading was 0.15 or higher
  • the offence occurred while you were driving for work purposes
  • the offence occurred whilst you were driving with a restricted licence
  • the offence occurred while you were driving a vehicle you were not authorised to drive
  • you are a learner driver or on your p-plates
  • you are unemployed

At Just Us Lawyers we can help put you in the best possible position to be successful in your application for a restricted licence. If you have been charged with a drink driving offence, and you will be unable to keep your job without being able to drive, contact our office on 07 3505 0355 for advice on whether you will be eligible for a restricted licence, and for assistance in making the application to court.


Things you need to know about the new GST Withholding Laws

BY NATALIE SMYTH

 

The Treasury Laws Amendment (2018 Measures No. 1) Bill 2018 received royal assent on 29 March 2018. The bill amends various tax legislation and requires some purchasers of real property to collect a seller’s GST liability at settlement and remit it directly to the ATO.

The bill was introduced following the 2015 senate enquiry on ‘Insolvency in the Australia construction industry” in an effort to reduce illegal phoenix activity by property developers. “Illegal phoenix activity is when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts, including taxes, creditors and employee entitlements.”[1]

When did the new GST withholding obligations take effect?

The changes brought about by this new GST withholding legislation primarily affects Contracts entered into from and after 1 July 2018. The GST withholding requirements do not apply to Contracts entered into prior to 1 July 2018 provided that the consideration for the supply (other than a deposit) is first provided before 1 July 2020. Off the plan contracts entered into prior to 1 July 2018 could be affected if construction/plan registration is likely to be completed after the 1 July 2020 deadline.

What types of transactions are affected?

A Purchaser will have a GST withholding obligation if:-

  1. The supply is by way of sale or long-term lease; and
  2. The supply is of New Residential Premises or Potential Residential Land.

The withholding obligation will not apply, however, if the purchaser is registered for GST and acquires the property for a creditable purpose.

What is a Creditable Purpose?

“You acquire or import a thing for a creditable purpose if you acquire or import it in carrying on your enterprise (including acquiring or importing it in the course of the commencement or termination of your enterprise)” [2] If the property is acquired for private or domestic purposes, then it will not be acquired for a creditable purpose.[3]

What types of real property will be classified as New Residential Premises and Potential Residential Land?

Residential Premises will be New Residential Premises if they:

  1. have not been sold previously as a residential premises and have not been previously the subject of a long-term lease; or
  2. have been created through substantial renovations of a building – i.e whereby all (or substantially all) of a building is removed or replaced; or
  3. if they have been built to replace demolished premises on the same land.

Potential Residential Land means “land that it is permissible to use for residential purposes, but that does not contain any buildings that are residential premises.”[4] The withholding obligations only apply to Potential Residential Land if the land is created by a property subdivision plan and the land is zoned for residential use under the local government planning schemes. If the planning schemes permit a number of uses for the land, and one of those uses is residential, then the land will be classified as Potential Residential Land.[5] Potential Residential Land does not include land that contains any buildings for a commercial purpose.

When must the GST withholding amount be paid?

It must be paid to the ATO on or before the day that the consideration for the taxable supply is first provide.[6] Generally, the consideration is first provided on the Settlement Date.

How much is the withholding amount?

The withholding amount is generally 1/11th of the Contract Price, however, if the margin scheme applies, then the withholding amount will be 7% of the Contract Price. The Contract Price is the GST inclusive price stated on the Contract and does not take into account any normal adjustments to the Contract Price (for example, for rates or water).

If the parties had negotiated a reduction in the Contract Price, for example, in exchange for the satisfaction of a building and pest condition, then the Contract Price, for the purposes of calculating the GST withholding amount, would not be discounted by the agreed reduction.

Sellers Notification and Purchaser Notification Obligations  

Seller’s Notice

All sellers of residential property must issue a notice to a purchaser advising the purchaser whether they must make a GST withholding payment. This notice is not required, however, for supplies of New Residential Land or Potential Residential Land if the purchaser is registered for GST and is acquiring the property for a creditable purpose.

Sellers will need to conduct an A.B.N. search of the purchaser to confirm whether or not the purchaser is registered for GST, however, a seller can rely on a purchaser’s statement in the Contract as to whether the purchaser is acquiring the property for a creditable purpose.

If the purchaser is required to withhold the GST amount and pay it directly to the ATO, then the seller’s notice must state:

  1. the seller’s name and ABN;
  2. the dollar amount to be paid by the purchaser;
  3. when the amount must be paid; and
  4. the GST-inclusive market value of any non-monetary consideration.

The notice must be provided by the seller prior to the seller making the taxable supply. Even if the seller fails to notify the purchaser, the purchaser will still have a GST withholding obligation and must withhold the GST amount and remit it to the ATO on or before settlement.

Purchaser Notice

Purchasers also have an obligation to notify the Commissioner of Taxation of the GST amount payable on or before the due date for payment, and this is done via approved forms that are accessible via the ATO website.

What are the main implications for property developers and purchasers?

  • Property Developers will need to consider the cash flow implications resulting from the new GST withholding laws. Previously, developers enjoyed the benefit of retaining the GST component from settlement as cash, as the GST liability was not required to be remitted to the ATO until lodgement of their next BAS.
  • If a purchaser fails to comply with their GST withholding obligation on reliance of a seller’s incorrect notice and the ATO later deems that the supply was a taxable supply and that the purchaser should have withheld the GST and paid it to the ATO at the time of settlement, the purchaser could still be liable to pay the seller’s GST liability. It is therefore important for a purchaser to undertake reasonable enquiries as to whether the withholding obligations apply to the transaction and must not blindly rely on a seller’s notice in circumstances where it is evident that there is a GST withholding obligation.

If you are a property developer requiring assistance with contract drafting to ensure that your sale contracts cover the new GST withholding law notification requirements, then please don’t hesitate to contact our commercial solicitor Natalie via reception@justuslaw.com.

Alternatively, if you are a purchaser or seller of residential or commercial property in Queensland and you require advice with respect to the application of the new GST withholding laws, please don’t hesitate to contact our Residential or Commercial conveyancing departments via email on reception@justuslaw.com.

[1] https://www.ato.gov.au/General/The-fight-against-tax-crime/Our-focus/Illegal-phoenix-activity/

[2] Paragraph 26 of the GSTR 2006/4 Goods and Services Tax Ruling Goods and services tax: determining the extent of creditable purpose for claiming input tax credits and for making adjustments for changes in extent of creditable purpose

[3] Ibid, paragraph 27.

[4] Section 195-1 A New Tax System (Goods and Services Tax) Act 1999 (Cth).

[5] Paragraph 24 , LCR 2018/4  Purchaser’s obligations to pay an amount for GST on taxable supplies of certain real property.

[6] Subsection 14–250(4) Taxation Administration Act 1953 (Cth).


Getting to know Just Us …. Nikki Barry

NIKKI BARRY – OFFICE MANAGER

If you could sum yourself up in 5 words, what words would they be?

Feisty, Independent, OCD, Fun & Generous

Why did you choose the career path that you are currently in?

I am very process driven – legal forms and systems seemed like a good fit.  Every matter is different, so it can be very interesting and challenging work.

Who is the person you have learnt the most from?

I have so many amazing people in my life who have inspired me and who have been strong influences in a personal and professional capacity.

What advice would you give to a 13 year old you?

Smile and people won’t even notice the freckles.

Do you have a favourite quote?

“No experience is a wasted experience if you learn from it” – but I don’t know who said it.

Tell us something about yourself that would surprise us

More often than people realise, I actually hold my tongue.

Top 3 life highlights

  1. News that my son was successful in obtaining a diesel fitter apprenticeship
  2. My daughter becoming school captain
  3. Returning to Brisbane after an eight year tree change.

What advice would you give to recent new hires?

We all bring skills and experiences to the table, but we can all still learn something new every day.

What aspects of your role do you enjoy the most?

Finding more efficient processes to improve our service to our clients and to enable our employees to achieve a suitable work/life balance.

What books are at your bedside?

Nora Roberts “Shelter in Place” and Jean Clare’s “Never Give Up”.

What children’s character can you relate with most and why?

Some days Dory from Nemo “Just keep swimming, just keep swimming” but I hope more often Moana because she’s strong, driven and strives to chase what she believes in.

What do you enjoy doing most in your spare time?

Yoga and hanging out with my kids and friends – it’s all about the company.

When was the last time you laughed so hard you cried?

Surprise 50th birthday cruise for a friend in July – there were 20 of us and we laughed so hard for four days.

Where do you see yourself in five years?

Happy with my life and proudly watching my kids flourish as young adults.

Nikki has recently re-joined Just Us Lawyers as Office Manager after a tree change out west for the past eight years.  Nikki is a Qualified Justice of the Peace and is available to witness/certify documents during business hours – call 07 3369 7145 to arrange a time.  


Supreme Court decision confirms attorney’s power to make Binding Death Benefits Nomination

By Sarah Camm

In a significant decision handed down last week, the Supreme Court of Queensland has held that a Binding Death Benefits Nomination (“BDBN”) executed by an attorney was valid.

Justice Bowskill’s decision in Re Narumon [2018] QSC 185 is significant because, until now, the question of whether an attorney has (or should have) this power has been unclear, and has been the subject of some discussion in the legal community.

The reason for this uncertainty is as follows:

  • An attorney can be given power to make financial and legal decisions on behalf of a principal, however the execution of a BDBN is not included in the examples of these types of decisions in the Powers of Attorney Act 1998 (Qld);
  • An attorney cannot be given the power to make decisions about special personal matters, including making a will and appointing an attorney, in part on a policy basis, because of the potential for abuse;
  • A BDBN, which provides direction for payment of a benefit after death of the principal, could be said to be testamentary or will-like in nature; but
  • BDBNs differ from a will in that they often lapse, and must be renewed or re-made every three years, depending on the rules of the particular fund.

 

Facts in Re Naruman

In 2013 Mr Giles made a lapsing BDBN with his SMSF, nominating his wife and their son to receive 47.5% of his death benefits each, and his sister to receive 5%.

Shortly after making the 2013 BDBN, Mr Giles lost capacity. Under an existing Enduring Power of Attorney, his wife and sister were appointed his attorneys for personal and financial matters.

In 2016, before the 2013 BDBN expired, the attorneys executed an extension of the 2013 Nomination. They also executed a new BDBN, because they were concerned that the 5% distribution to Mr Giles’ sister in the 2013 BDBN, who is not a dependent as required by superannuation legislation, would invalidate the document.

The Court had to determine:

  1. Whether the 2013 BDBN was valid, despite the nomination of his sister to receive 5%
  2. Whether an attorney can execute a BDBN on behalf of the principal member
  3. Whether the extension of the 2013 BDBN or the new BDBN executed in 2016 were conflict transactions, and whether this invalidated the documents

 

The 2013 BDBN

The Court found that the 2013 BDBN was valid, but that as the member had no power to nominate his sister, and the trustee was not authorised to pay the benefit to her, the nomination of Mr Giles’ sister to receive the 5% benefit was of no effect.

 

Attorneys executing BDBNs generally.

The Court found that nothing in the Superannuation legislation appears to restrict an attorney of a member executing a nomination on behalf of that member, noting that the terms of the fund deed itself actually govern the rights of a member to make a BDBN.

The terms of Mr Giles’ fund deed did not prohibit an attorney executing a BDBN on behalf of a member and in fact expressly contemplated that they could.

The Court then considered the Powers of Attorney Act 1998 (Qld) itself and held as follows:

The effect of a BDBN, if valid, is to bind the trustee of the superannuation fun to pay benefits, following the member’s death, to the nominated persons (and, if relevant, to do so in the nominated way). That does not seem to fall within any of the examples in the definition of a financial matter, including as a legal matter relating to the principal’s financial matters. But the examples are not exhaustive and do not limit the meaning of the provision. It is difficult to see why the exercise of a member’s right under a SMSF deed, to require the trustee of the fund to pay benefits, after their death, in a particular way would not be “a matter relating to the [member’s] financial… matters”. Given the breadth of meaning of the word “financial”… such an act does fall within the meaning of this term.[1]

The Court also held that, although it deals with benefits of a member after their death, a BDBN is not a testamentary act, so it does not fall within the restricted ‘special personal matters’.

While acknowledging the possibility for abuse by allowing attorneys to make a BDBN on behalf of the principal, the Court noted that several protections against abuse exist in the making of an EPOA, as well as in the attorney’s duties to act honestly and in the principal’s interests, and to avoid a conflict of interest.

 

The 2016 Extension

The Court held that there was no conflict of interest in the execution of the extension by the attorneys. This Court accepted that the reason for executing the extension was to ensure continuity in Mr Giles’ estate planning and that his wishes continued to have effect. While the attorneys gained some benefit, this was held to be incidental to the exercise of the power, and coincided (rather than conflicted) with the interests of the principal. The 2016 extension was therefore held to be valid.

 

The new 2016 BDBN

The Court was not prepared to hold that the new BDBN made in 2016 was valid. The new BDBN removed the 5% nomination to Mr Giles’ sister, and nominated Mr Giles’ wife and son to each receive 50% of the benefit. While the change was minor, it was held that without express authority in the EPOA to enter into conflict transactions, the attorneys could not make a BDBN which changed what Mr Giles had proposed in favour of themselves.

 

Conclusion

Re Narumon does resolve some ambiguities in this important discussion. It is important to note however that the Court was considering circumstances where there was an existing BDBN to refer to. The Court did not exclusively determine whether, even if the EPOA did have a conflict clause, the execution of a BDBN either changing the member’s existing nomination or where the member had no previous nomination, would be valid.

Unfortunately, Binding Death Benefits Nominations are often overlooked in the Estate Planning process. EPOAs, too, are seen as a DIY document, simply containing a number of tick boxes for completion. Trust Deeds are often drafted by an accountant, and executed without a legal advice from your estate planning solicitor.

The decision in Re Narumon highlights the importance of having well considered advice over all aspects of your estate plan. At Just Us Lawyers we can review your existing EPOAs, BDBNs and other estate planning documents to ensure that they will do what you want them to.

We can draft appropriate conflict clauses to ensure your attorneys have the appropriate powers to act in your interests, and provide you with certainty and peace of mind that your affairs will be taken care of.

[1] Re Narumon [2018] QSC 185 at [69].


Tips for Property Sellers

By Remy Forster

The most stressful part of selling a property is generally considered to be the steps taken prior to a contract being signed – constant open homes, receiving (and rejecting) unreasonable offers, staging a house and negotiating with tenants are all common aggravations. Unfortunately the work of selling a property doesn’t stop there, and it is usual for a step or two to be missed in the process of preparing for a property settlement once the stress of finding a Buyer has been alleviated. Below we outline the major items to prepare for as a Seller to help you get your property settlement completed on time.

 

1. Make sure you can sell the property.

Not all Sellers are disposing of property that they legally own. If you are selling a property on behalf of someone else, or if you will be acting on their behalf for a part of the conveyance due to their absence, it is vital that you have the correct documentation in place for the settlement to be completed. For example:

  1. If you have changed your name since you purchased the property, you will need to be able to provide evidence that you are the same person (for example a marriage certificate or change of name certificate),
  2. If you are assisting a partner or spouse in selling a property, your legal representative should not be able to accept your instructions on their behalf without a signed authority (such as a Power of Attorney),
  3. If you are selling the property on behalf of a family member, partner or spouse and you intend to execute all associated documentation on their behalf, you will need a registered Power of Attorney (for further guidance on this, see our blog on registering a Power of Attorney[1]), or
  4. If you are selling the property on behalf of a deceased estate, you will need evidence that the estate is being administered and/or has been registered. The title to the property will also need to be transferred out of the name of the deceased and into the name of the personal representative before settlement documentation can be executed.

If you are unsure as to whether you have sufficient documentation, or if you have the legal ability to sell a property, we would recommend that you contact your legal representative prior to executing any sale contracts.

 

2. Release your property debts.

In order to sell your property, you will need to be able to release any debts held over the property title. Most sellers will only have a mortgage over the property title, and having this debt released requires you to contact the financial institution which holds the mortgage (for further guidance on this, see our blog on tips for discharging a mortgage[2]). However, if you have any other debts over the property, such as a writ or caveat, you will also need to contact the parties who hold these debts to arrange the debts to be released. If you have a debt over the property to a less formal party (for example, a mortgage over the property which has been lodged by a family member), you will still need to contact that party for them to arrange releasing their debt over the property.

 

3. Obtain a Capital Gains Clearance Certificate

Due to recent legislative changes, certain property settlements require the Sellers to provide evidence from the Government that the Buyers are not required to withhold a portion of the purchase price. This evidence is provided by the Government in the form of a “Capital Gains Clearance Certificate” upon application by the Seller. We recommend that all Sellers verify if their property falls within the requirements for this Certificate to be provided (for further guidance on this, see our blog on Capital Gains Clearance Certificates[3]) and apply for the Certificate once their property is listed for sale. Certificates are valid for twelve months when issued, and a new application can be submitted if the Certificate expires prior to the property settlement occurring (applications can be made online[4]).

 

4. Have your identity documents ready

It is a requirement in Queensland for all legal representatives to verify the identity of their clients in conveyancing transactions. For sales this is especially important to ensure someone is not fraudulently selling a property they do not own, or do not have right to. This requirement means your legal representative should ask for a certified copy of 100 points of identity documentation, or for you to complete a Verification of Identity with a verification provider (for example, Australia Post). The most common documents which you can use to verify your identity are your current Australian passport, current Australian Driver’s license and any change of name or marriage certificates which show your name has changed since your passport and/or driver’s license were issued (if you don’t have these documents available, please see Schedule 8 of the Participation Rules which list a table of the possible documents you can provide[5]). If you cannot provide sufficient documents to prove your identity, your legal representative may not be able to act on your behalf in the transaction.

 

5. Check if you will be available during the transaction.

In the mysterious ways of the universe, it is common for the perfect Buyer for your property to come along when you already have a trip or other adventures planned. It is always important when signing a contract that you make sure you will be available for at least a portion of the transaction, and that you advise your legal representative if you will not be available for the entire time. During a conveyancing transaction there will be additional documents for you to sign as the transaction progresses, and most likely instances where your legal representative will need to contact you for your instructions. If you are unable to complete these steps, it will make it difficult for your settlement to be completed on time.

 

6. Disclose, disclose, disclose.

Standard conveyancing transactions require Sellers to disclose certain information about the property to any potential Buyers, and these disclosures need to be reflected on the Contract the parties sign. For example, a Seller is required to disclose to the Buyer:

  1. If they have conducted work on the property under an Owner Builder License,[6]
  2. If there are any work notices issued by the local council for the property[7],
  3. If there are any tree disputes registered with QCAT that involve the property[8], or
  4. If there are any defects or circumstances relating to the Body Corporate which would materially prejudice a Buyer.[9]

If the Seller does not disclose this information, the Buyers may be able to either terminate the Contract or pursue the Seller for costs. We recommend that Sellers gather any information about the property that they have in preparation to disclose this information to the Buyers.

 

7. Gather your settlement documents

If you’re selling a residential home, you may not have any documents to gather or collect. Below is a list of documents which affect some property sales and we recommend that you peruse to see if they apply:

  1. Certificate of Title – some Sellers have an original Certificate of Title for their property. These Certificates were only originally issued prior to the 1990’s, and since then have only been issued upon request by the party who owns the property. You can check if you have a Certificate of Title by viewing a copy of a Title Search for your property (which your real estate agent should have ordered as part of preparing the contract of sale).
  2. Tenancy documents – if the property has tenants and you have copies of rental agreements, rental ledgers or bond forms, you will need to provide these to your legal representative prior to settlement. If you have a property manager, they may hold these documents for you.
  3. Building finals – if you have conducted any work on the property since you purchased it, you may have copies of final inspection certificates for this building work. It is not a legal requirement in Queensland for you to provide these to the Buyer (unless there is a special condition in your contract requiring this), but having these on hand can smooth over issues which arise during the conveyancing process.
  4. Rates, water and body corporate notices – the Buyers are supposed to conduct searches on these accounts during the conveyancing process, however if they do not, having copies of these notices will assist your legal representative in preparing for settlement.

Finally, you will need to make sure you have collected all keys, remotes and access cards that you hold for the property for these to be handed to the Buyer following settlement.

If you have any queries about the conveyancing process, or generally about what to do when selling a property, please contact our Conveyancing team.

For the best Conveyancing lawyers in Brisbane call/email Just Us Lawyers or complete our enquiry form for a quote today

 

[1] https://justuslaw.com/powers-attorney-implications-registration/

[2] https://justuslaw.com/discharging-a-mortgage-tips-advice/

[3] https://justuslaw.com/youre-selling-750k-consider-frcgw-tax/

[4] https://www.ato.gov.au/Forms/Capital-gains-withholding-clearance-certificate-application-online-form-and-instructions—for-Australian-residents/

[5] https://www.dnrm.qld.gov.au/__data/assets/pdf_file/0004/307129/participation-rules-electronic-conveyancing-v3.pdf

[6] http://www.qbcc.qld.gov.au/buying-existing-home/buying-or-selling-owner-built-property

[7] https://www.brisbane.qld.gov.au/planning-building/applying-post-approval/after-approval/post-approval-operational-works/unauthorised-work

[8] http://www.qcat.qld.gov.au/matter-types/tree-disputes

[9] S223 https://www.legislation.qld.gov.au/view/pdf/2017-07-03/act-1997-028


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