ATTA 2010
Black Fella Land: White Fella Tax
Changing Times – Changing the CGT Implications of Aboriginal/Native Title
Part 1 : CGT Asset Julie Cassidy
Black Fella Land : White Fella Tax
Introduction:
• No provisions of ITAA or ITAA 1997 dealing with tax implications of Native title
• 1998 Joint Press Release
• 2009 Report of the Native Title Payments Working group
• Many tax issues for traditional owners and payers such as mining companies
• CGT implications for traditional owners
• Part 1: CGT asset
• Part 2: CGT Events
Black Fella Land : White Fella Tax
Aboriginal Title:
• Not terra nullis: Mabo 2
• Annexation did not extinguish aboriginal title: Mabo 2
• Aboriginal title recognised by the common law: Mabo 2
• Susceptible to extinguishment by the Crown: Mabo 2
• Right to compensation recognised in other jurisdictions
• Majority of Justices in Mabo 2 deny any right to compensation
• Racial Discrimination Act 1975 (Cth)
Black Fella Land : White Fella Tax
Native Title:
• Native Title Act 1993 (Cth)
• Definition of Native title: s 223
• Native title is a statutory right, not common law right: Yorta Yorta
• Restrictive definition of Native title: Yorta Yorta
• Courts determine Native title: ss 13, 24FB, 24FC and 68
• Extinguishment in breach of the Racial Discrimination Act 1975 (Cth)
• Compensation: Pt 2 Div 5 Native Title Act 1993 (Cth)
• Indigenous Land Use Agreements
Black Fella Land : White Fella Tax
CGT Asset:
• CGT Events A1, C1, C2, E1 and H2 require a CGT asset
• Chap 3 only applies to the disposal of an asset acquired on or after 20 September 1985
• Section 160A ITAA confined to proprietary assets: Hepples
• Last acquired 26 June 1992: s 108-5 Income Tax (Transitional Provisions) Act 1997
• Proprietary v personal v popular assets
• Section 160A ITAA amendment
• Section 108-5 ITAA 1997
Black Fella Land : White Fella Tax
Identifying the CGT Asset:
• Aboriginal title
• Native title
• Statutory rights (right to compensation, right to negotiate)
• Chose in action / contractual rights
• Taxation Ruling TR 95/35: look-through approach to the underlying pre-CGT asset
Black Fella Land : White Fella Tax
Aboriginal title:
• Held since “Time immemorial”
• Held pursuant to Indigenous sovereignty prior to British annexation
• Not sourced in any legislative recognition
• Is the pre-CGT status of aboriginal title lost through the operation of s 128-15(4) ITAA 1997?
• Right to compensation not an incident of aboriginal title: Mabo 2
• Applicability of Taxation Ruling TR 95/35
• Proprietary, personal or popular in nature?
• Inalienable personal usufructuary right
Black Fella Land : White Fella Tax
Native title:
• A legislative incorporation of aboriginal title: pre-CGT asset?
• Statutory title based on requirements of s 223: Yorta Yorta
• Not sourced in the common law: Yorta Yorta: post CGT?
• Requires a court determination: ss 13, 24FB, 24FC and 68
• Origin in traditional law and custom, not the Act: Yorta Yorta
• Frozen in time theory: pre-CGT?
• Succession issue: post-CGT?
• Proprietary, personal or popular in nature?
• Is it inalienable or transmissible statutory title?
Black Fella Land : White Fella Tax
Statutory rights:
• Right to compensation not an incident of aboriginal title: Mabo 2
• Statutory right: Yorta Yorta
• Right to negotiate not confined to established Native title
• Applicability of Taxation Ruling TR 95/35?
• Only applies to extinguishment of title: 1998 Joint Press Release
• Applicability to ILUAs that only impair title?
• Proprietary, personal or popular in nature?
• Transmissible statutory rights or personal rights that may only be exercised by the traditional owners?
• Statutory rights under the Native Title Act 1993 (Cth) would be post 26 June 1992: s 108-5.
Black Fella Land : White Fella Tax
Chose in action:
• Contractual rights under ILUAs after 20 September 1985: post CGT
• Applicability of Taxation Ruling TR 95/35?
• Proprietary, personal or popular in nature?
• Are they transmissible chose in action?
• Is the identity of the payer important?
• Is the identity of the traditional owners important?
• Contractual rights pre 26 June 1992: s 160A.
• ILUAs under the Native Title Act 1993 (Cth) would be post 26 June 1992: s 108-5.
Black Fella Land : White Fella Tax
Conclusion:
• What is the asset for CGT purposes?
• Are the pre-CGT or post CGT assets?
• When will Taxation Ruling TR 95/35 apply?
• Are they proprietary, personal or popular in nature or sui generis?
• CGT Events no clearer: Part 2?
• At least arguable post CGT assets and CGT Events applicable?
• To tax Indigenous communities as a result of acts that extinguish or impair their traditional ownership is incongruous
• Need for express exemption
