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Commonwealth act
This Act has been repealed and is no longer in force. It is retained for historical reference.
What this law does, in plain terms
The Act creates a tax called "gift duty" on certain transfers of property (called "gifts") that took place between 29 October 1941 and before 1 July 1979 (see s.11 and s.2). The Parliament set the rates of duty (s.11).
A "gift" is any disposition of property made otherwise than by will without adequate consideration — the Act defines disposition and gift in detail (s.4). The Act also sets rules about where property is considered to be located for the purpose of the duty (s.13).
Who it affects and who pays
How it works mechanically
Reporting: If a gift (aggregated with other gifts from the same donor within the preceding 18 months) exceeds $7,500, the donor or donee must file a return with the Commissioner in the prescribed form — within 1 month for gifts made in Australia, or within 3 months for gifts made outside Australia (s.19). The donor’s compliance generally releases the donee from filing, but the donee bears the onus of proving the donor complied (s.19(3)).
Assessment: The Commissioner of Taxation administers the Act and makes assessments based on returns and any other information available (s.5, s.21). If returns are missing or unsatisfactory, the Commissioner may make a default assessment in his judgment (s.23). Notices of assessment must be served on the donor (s.24). Objections are handled under Part IVC of the Taxation Administration Act 1953 (s.24AA).
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Direct links to the current provisions in Gift Duty Assessment Act 1941.
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View on official registerSourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Payment and enforcement: Duty is due on making the gift (s.25(1)). The Commissioner can allow extensions or instalments (s.26). Unpaid duty attracts additional duty (penalty interest) at 20% per annum from specified dates (s.27). The Commissioner may sue to recover unpaid duty (s.28), register gift duty as a charge against real property (s.29), and no statute of limitation bars recovery (s.30).
Valuation rules: The Act sets valuation rules for gifts (value generally at time of gift; no allowance for contingencies; limited deductions for encumbrances) and special rules for valuing shares (s.18). Where inadequate consideration is given, the value of the gift is the shortfall (s.17).
Exemptions and special rules: A number of exemptions exist: employer contributions to pension/retirement funds, certain employer payments to employees (including some gratuities), gifts to non‑profit institutions and to Commonwealth or State, gifts in the course of business for commercial benefit in specified circumstances, gifts to family members (s.14). There are detailed exclusions for certain persons connected with United States Government undertakings and a rule excluding gifts of certain personal property held in Australia by such persons if subject to US gift tax (s.15). Exempt gifts do not count when determining liability or rate for other gifts (s.16).
Compliance and penalties for non‑cooperation or false statements: Failure or refusal to furnish required returns/information can trigger a penalty equal to double the gift duty payable (s.42(1)). False or misleading statements that increase duty also attract a doubling penalty (s.42(2)). Small minimum penalty floor applies (s.42(3)). The Commissioner may remit penalties in his discretion (s.42(6)).
Information powers and secrecy: The Commissioner can require persons (including public officers) to produce documents and give evidence on oath (s.39). Officers who acquire information are bound by secrecy obligations and may face criminal penalties (fine or imprisonment) for improper disclosure (s.10). The Commissioner may, in certain circumstances, share information with other Commonwealth or State agencies, the Administrative Appeals Tribunal, certain pension administrators, and an authority of a foreign country administering gift duty (s.10(4), (4)(ca), (d), (e)).
Practical incentives, costs and trade-offs (mechanical, not normative)
Who pays: Donors and donees share liability (s.25(2)). Donees can be relieved of filing if the donor files (s.19(3)), which creates an incentive for donors to submit timely, accurate returns.
Compliance burden: Mandatory reporting for gifts above the $7,500 threshold (s.19) creates administrative obligations on individuals and entities that transfer assets. The Commissioner can demand further returns or information (s.20, s.39), and failure or false information carries a heavy financial penalty (double duty) (s.42).
Administrative discretion: The Commissioner has wide powers to assess from any information, make default assessments (s.21, s.23), amend assessments (s.22), grant extensions or instalment arrangements (s.26), register charges on property (s.29), and remit penalties (s.27(3), s.42(6)). Those powers concentrate decision-making with the Commissioner and create implementation discretion.
Effects on private choices and transactions: The Act’s valuation rules (s.17–18), joint liability (s.25), power to register a charge (s.29), and ability to sue or add penalty interest (s.27–28) can affect the timing and structure of transfers (people may alter timing or form of transfers to avoid duty or reporting). Exemptions for business-related gifts in certain corporate cases (s.14(f)) limit interference with ordinary commercial write-offs in some contexts.
Cross-border and special cases: The Act treats location for tax purposes in specific ways (s.13) and contains special rules for persons connected with US Government undertakings (s.15). It also permits limited sharing of information with foreign authorities administering gift duty (s.10(4)(ca)). These rules create targeted exceptions and coordination mechanisms but also add complexity for cross-border cases.
Key implementation risks and opportunity costs
Enforcement relies on information flows and the Commissioner’s investigatory powers (s.21, s.23, s.39). Where records are incomplete, the Commissioner may use judgment to assess duty (s.23), which can create disputes (objection route is available under Part IVC — s.24AA).
The burden of proof and practical risk falls on taxpayers where filing obligations or joint liability exist (s.19(3), s.25). Registering charges against property (s.29) may reduce marketability or require trustees to raise finance (s.25(6)).
Short final note on coverage: The Act is limited in time: it applies to gifts made on or after 29 October 1941 and before 1 July 1979 (s.1, s.2, s.11).