Bills Digest No. 9 2001-02
Bankruptcy (Estate Charges) Amendment Bill 2001
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Bankruptcy (Estate Charges) Amendment Bill 2001
Date Introduced: 7 June 2001
House: House of Representatives
Portfolio: Attorney-General
Commencement: At the same
time as the Bankruptcy Legislation Amendment Act 2001.
To amend the Bankruptcy (Estate Charges) Act 1997
to:
- exempt any surplus in a bankrupt estate from the scope of the realisation
charge
- align charge periods with the financial year
- remove current payment obligations for the interest charge and the
realisations charge if the amount payable would be less than $10, and
- close some charge-avoidance opportunities.
This Bill accompanies the Bankruptcy Legislation Amendment
Bill 2001. The Background to both Bills is contained in the Bills Digest
on the Bankruptcy Legislation Amendment Bill 2001, No. 9 of 2001-02.
Under section 6 of the Bankruptcy (Estate Charges)
Act 1997, a realisations charge is payable by the trustee, whether
the Official Trustee or a private registered trustee, to the Commonwealth.
The charge is payable on the administration of all bankrupt estates including
deceased estates, and also in relation to deeds of assignment, deeds of
arrangement or compositions entered into by debtors under Part X of the
Bankruptcy Act 1966. It is not payable on Part IX debt agreements
or compositions or schemes of arrangement under Division 6 of Part IV
of the Bankruptcy Act 1966.
Realisations charge
Currently, the realisations charge is payable within
21 days of the end of the 'charge period' (subsection 6(3)). The charge
periods are 1 November to 30 April, and 1 May to 31 October in any year
(subsection 4(1)). Item 1 amends the charge periods to align them
with the financial year. In future, the charge periods will be 1 January
to 30 June, and 1 July to 31 December in any year. As a transitional measure,
the charge period during which the Bill commences will be extended by
two months to either 30 June or 31 December to enable subsequent charge
periods to line up with the financial year (item 11).
Item 6 also extends the charge payment period
from 21 days to 35 days, to account for possible inconvenience because
of the holiday period in January. This will apply to charge periods ending
after the Bill commences (item 13).
Item 4 extends the realisations charge to apply
also to amounts received by a trustee of a composition or scheme of arrangement
under Division 6 of Part IV of the Bankruptcy Act 1966. This is
because these measures had been favoured over Part X arrangements because
of the charge on the latter but not on the former.(1) This
will apply to all compositions or schemes of arrangement that are accepted
by creditors after the Bill commences (item 14).
The realisations charge will not be payable on any surplus
money in the bankrupt's estate (item 7). The charge is calculated
as a percentage of the total amount received by the trustee. Currently,
this includes any amounts which are surplus to the amount required to
pay off the bankrupt's debts in full. The proposed amendment will exempt
any surplus amount from the charge. This will apply to amounts received
after the Bill commences (item 15).
Item 8 contains an anti-avoidance provision which
will treat amounts of money which are 'applied or dealt with on behalf
of the trustee' as being amounts received by the trustee, and thus subject
to the realisation charge. This is designed to counter avoidance arrangements
which are sometimes entered into, whereby the trustee directs money to
be paid in a certain manner without actually receiving the money.(2)
This will apply to amounts applied or dealt with after the Bill commences
(item 16).
Interest charge
Currently, any interest paid on money banked by the trustee
before distributing it is payable as a charge to the Commonwealth (section
5). Item 3 extends the charge payment period from 21 days after
the charge period to 35 days. This will apply to charge periods ending
after the Bill commences (item 13).
Low charge amounts
Neither the realisations charge (item 5) nor the
interest charge (item 2) is payable if it would be less than $10
in any particular 6 month charge period. This is designed to 'reduce handling
costs for trustees and the Commonwealth alike'.(3) The regulations
may substitute a higher amount for the current amount of $10. This will
apply to charge periods ending after the Bill commences (item 12).
- Explanatory Memorandum, p. 3.
- Explanatory Memorandum, p. 4.
- Explanatory Memorandum, p. 2.
Katrine Del Villar 25 July 2001 Bills Digest Service
Information and Research Services
This paper has been prepared for general distribution to Senators and
Members of the Australian Parliament. While great care is taken to ensure
that the paper is accurate and balanced, the paper is written using information
publicly available at the time of production. The views expressed are
those of the author and should not be attributed to the Information and
Research Services (IRS). Advice on legislation or legal policy issues
contained in this paper is provided for use in parliamentary debate and
for related parliamentary purposes. This paper is not professional legal
opinion. Readers are reminded that the paper is not an official parliamentary
or Australian government document.
IRS staff are available to discuss the paper's contents with Senators
and Members
and their staff but not with members of the public.
ISSN 1328-8091
© Commonwealth of Australia 2000
Except to the extent of the uses permitted under the Copyright Act
1968, no part of this publication may be reproduced or transmitted
in any form or by any means, including information storage and retrieval
systems, without the prior written consent of the Parliamentary Library,
other than by Members of the Australian Parliament in the course of their
official duties.
Published by the Department of the Parliamentary Library, 2001.
|
