State Revenue Legislation Amendment Act 2000 No 51

An Act to make miscellaneous amendments to certain State revenue legislation; and for other purposes.

1 Name of Act

This Act is the State Revenue Legislation Amendment Act 2000.

2 Commencement

(1)  This Act commences on the date of assent, except as provided by this section.

(2)  The following provisions commence, or are taken to have commenced, on the dates indicated:

Schedule 1 on 4 February 2000

Schedule 2 [6]–[16], [44] and [54] on 1 July 2000

Schedule 2 [17]–[43], [53] and [55] on 1 March 2000

Schedule 2 [45] on 1 February 2000

Schedule 2 [47] on 11 November 1999

Schedule 2 [48] on 1 December 1999

Schedule 2 [46] and [50] on 23 May 2000

Schedule 2 [51] on 22 September 1999

3 Amendment of Debits Tax Act 1990 No 112

The Debits Tax Act 1990 is amended as set out in Schedule 1.

4 Amendment of Duties Act 1997 No 123

The Duties Act 1997 is amended as set out in Schedule 2.

5 Amendment of Land Tax Management Act 1956 No 26

The Land Tax Management Act 1956 is amended as set out in Schedule 3.

6 Amendment of Pay-roll Tax Act 1971 No 22

The Pay-roll Tax Act 1971 is amended as set out in Schedule 4.

7 Amendment of Premium Property Tax Act 1998 No 79

The Premium Property Tax Act 1998 is amended as set out in Schedule 5.

8 Amendment of Roads Act 1993 No 33

The Roads Act 1993 is amended as set out in Schedule 6.

9 Amendment of Taxation Administration Act 1996 No 97

The Taxation Administration Act 1996 is amended as set out in Schedule 7.

Schedule 1 Amendment of Debits Tax Act 1990

(Section 3)

[1] Section 3 Definitions

Insert “or a non-profit organisation having as one of its objects a charitable, benevolent, philanthropic or patriotic purpose,” after “institution,” in paragraph (a) (v) (A) of the definition of excluded debit in section 3 (1).

[2] Section 3 (1)

Insert “organisation,” after “institution,” where secondly occurring in paragraph (a) (v) of the definition of excluded debit in section 3 (1).

[3] Section 3 (1)

Insert “organisation,” after “institution,” where secondly occurring in paragraph (a) (vi) of the definition of excluded debit in section 3 (1).

[4] Schedule 3 Savings and transitional provisions

Insert “State Revenue Legislation Amendment Act 2000” at the end of clause 1A (1) of Schedule 3.

Schedule 2 Amendment of Duties Act 1997

(Section 4)

[1] Section 54 Change in trustees

Omit section 54 (3). Insert instead:

  

(3)  Duty of $10 is chargeable in respect of a transfer of dutiable property to a person other than a special trustee as a consequence of the retirement of a trustee or the appointment of a new trustee, if the Chief Commissioner is satisfied that, as the case may be:

(a)  none of the continuing trustees remaining after the retirement of a trustee is or can become a beneficiary under the trust, and

(b)  none of the trustees of the trust after the appointment of a new trustee is or can become a beneficiary under the trust, and

(c)  the transfer is not part of a scheme for conferring an interest, in relation to the trust property, on a new trustee or any other person, whether as a beneficiary or otherwise, to the detriment of the beneficial interest or potential beneficial interest of any person.

If the Chief Commissioner is not so satisfied, the transfer is chargeable with the same duty as a transfer to a beneficiary under and in conformity with the trusts subject to which the property is held, unless subsection (3A) applies.

(3A)  Duty of $10 is chargeable in respect of a transfer of property as a consequence of the retirement of a responsible entity of a managed investment scheme or the appointment of a new responsible entity of a managed investment scheme if the Chief Commissioner is satisfied that the only beneficial interest acquired by a person in relation to the property as a result of the transfer is a beneficial interest acquired by the replacement or new responsible entity solely because of its appointment as responsible entity for the scheme.

[2] Section 64 Conversion of lots to strata title

Insert at the end of section 64 (b):

  

, and

(c)  ad valorem duty was paid at the time that the land use entitlement was acquired by the transferee.

[3] Section 65 Exemptions from duty

Insert “or transfer” after “vesting” wherever occurring in section 65 (7) (b).

[4] Section 65 (7) (b)

Omit “that occurs by or as a consequence of a decision of the Liquor Administration Board or order of the Licensing Court”.

[5] Section 68 Exemptions—break-up of marriages and domestic relationships

Insert at the end of section 68 (2) (b) (ii):

  

, or

(iii)  a purchase at public auction of property that, immediately before the auction, was relationship property where the public auction is held to comply with any such order or agreement.

[6] Division 1 of Part 8, heading

Omit “First home purchase scheme”. Insert instead “First Home Plus”.

[7] Sections 69 and 70

Omit the sections. Insert instead:

  

69 The nature of the scheme

This scheme is intended to help people who are buying their first home. Under the scheme, the purchase and any mortgage given to assist the financing of the purchase is subject to a concession or exemption from duty.

70 Commencement

The following transactions and instruments are eligible for consideration under the scheme:

(a)  agreements for sale or transfer entered into on or after 1 July 2000,

(b)  transfers that occur on or after 1 July 2000,

(c)  mortgages over land the subject of those agreements or transfers.

[8] Section 72 Eligible persons—net taxable income

Omit the section.

[9] Section 74 Eligible agreements or transfers

Omit section 74 (3). Insert instead:

  

(3)  The total consideration payable under the agreement or transfer (that is, the amount paid for the house or unit, or the land and the construction of a house or unit on the land, and any furnishings and other items acquired under the agreement or transfer or any related document) must be less than:

(a)  $300,000 if the property is located in the Metropolitan Area and has a private dwelling built on it, or

(b)  $250,000 if the property is located elsewhere than in the Metropolitan Area and has a private dwelling built on it, or

(c)  $140,000 if the property is located in the Metropolitan Area and comprises a vacant block of residential land, or

(d)  $110,000 if the property is located elsewhere than in the Metropolitan Area and comprises a vacant block of residential land.

Note—

“Metropolitan Area” is defined in the Dictionary.

[10] Section 74 (5) and (6)

Omit the subsections.

[11] Section 76 Other qualifications

Omit section 76 (2).

[12] Section 80

Omit the section. Insert instead:

  

80 Duty payable if application approved

(1)  If an application concerning an eligible agreement or transfer is approved and the consideration payable under the agreement or transfer is not more than the following amounts, no duty is chargeable on the agreement or transfer:

(a)  $200,000 if the property is located in the Metropolitan Area and has a private dwelling built on it, or

(b)  $175,000 if the property is located elsewhere than in the Metropolitan Area and has a private dwelling built on it, or

(c)  $95,000 if the property is located in the Metropolitan Area and comprises a vacant block of residential land, or

(d)  $80,000 if the property is located elsewhere than in the Metropolitan Area and comprises a vacant block of residential land.

(2)  If an application concerning an eligible agreement or transfer is approved and subsection (1) does not apply to the agreement or transfer, duty is chargeable on the agreement or transfer as follows:

(a)  if the property is located in the Metropolitan Area and has a private dwelling built on it—at the rate of 8.99% of the total consideration payable under the agreement or transfer, less $17,980.00, or

(b)  if the property is located elsewhere than in the Metropolitan Area and has a private dwelling built on it—at the rate of 9.65% of the total consideration payable under the agreement or transfer, less $16,885.00, or

(c)  if the property is located in the Metropolitan Area and comprises a vacant block of residential land—at the rate of 7.53% of the total consideration payable under the agreement or transfer, less $7,152.00, or

(d)  if the property is located elsewhere than in the Metropolitan Area and comprises a vacant block of residential land—at the rate of 7.8% of the total consideration payable under the agreement or transfer, less $6,240.00.

Note—

“Metropolitan Area” is defined in the Dictionary.

[13] Section 80A

Insert after section 80:

  

80A Definitions

In this Subdivision:

couple means any 2 people residing together or who intend to reside together in the home or on the land the subject of the application.

group self help scheme means a scheme under which the participants contribute labour to a housing project instead of a cash deposit in order to obtain finance to purchase a house and land at a price that is lower than the current full market value.

single person means a person residing alone (whether or not with children) or who intends to so reside in the home or on the land the subject of the application.

[14] Part 8, Division 1, Subdivision 1A

Insert before section 81:

Subdivision 1A  Payment of instalments under First Home Purchase Scheme prior to 1 August 1998

[15] Section 85 Definitions

Omit the section.

[16] Section 92

Omit the section. Insert instead:

  

92 Other provisions

(1)  Sections 76 and 79 apply to this scheme in the same way as they apply to First Home Plus.

(2)  Sections 78 and 81–84 apply to this scheme in the same way as they applied to the First Home Purchase Scheme before 1 August 1998.

[17] Section 145 Imposition of duty

Insert at the end of section 145 (1) (d):

  

, and

(e)  on a sale or purchase of marketable securities on a RIOT’s own account, if the sale or purchase is effected in New South Wales, and

(f)  on an associated transaction with a RIOT (being a transaction referred to in section 149 (1) (d)).

[18] Section 145 (3AA)

Insert after section 145 (3):

  

(3AA)  For the purposes of subsection (1) (e), a sale or purchase on a RIOT’s own account is effected in New South Wales if:

(a)  it arises from a manual RIOT order that an individual, being the RIOT or an employee or agent of the RIOT, who is present in New South Wales, instructed a SEATS operator to put into the market, or

(b)  it arises from an automated RIOT order that was put by the RIOT into SEATS from New South Wales, or

(c)  it did not a arise from a manual RIOT order or an automated RIOT order, and an individual, being the RIOT or an employee or agent of the RIOT, who is present in New South Wales, instructed a SEATS operator to report a trade to the market.

[19] Section 145 (4)

Insert in alphabetical order:

  

automated RIOT order means an order that is submitted into SEATS on a RIOT’s own account without being keyed or rekeyed by an individual.

manual RIOT order means an order that is submitted into SEATS on a RIOT’s own account by being keyed or rekeyed by an individual.

[20] Section 145

Omit note (3) to section 145.

[21] Section 147 Who is a “broker”?

Omit the note to the section. Insert instead:

  

Note—

The meaning of “broker” in the Business Rules of the Australian Stock Exchange does not include a RIOT.

[22] Section 148 Presumptions relating to transactions of brokers and RIOTs

Insert “or RIOT” after “a broker” wherever occurring.

[23] Section 148

Insert “RIOT,” after “the broker,” wherever occurring.

[24] Section 148

Insert “or RIOT” after “broker” wherever occurring in the note to section 148.

[25] Section 151 Duty at general rate

Insert “or RIOT” after “broker”.

[26] Section 151A Duty at concessional rate—New Zealand and Papua New Guinea corporations

Insert “or RIOT” after “broker”.

[27] Section 153 Marketable securities held on account of RIOTS and futures brokers

Omit “registered independent options trader” wherever occurring.

Insert instead “RIOT”.

[28] Section 153 (1) (a) and (c)

Omit “an options trader” wherever occurring. Insert instead “a RIOT”.

[29] Section 153

Omit “the options trader” wherever occurring.

Insert instead “the RIOT”.

[30] Section 153A

Insert after section 153:

  

153A Marketable securities held by RIOT on its own account

Duty is payable by a RIOT at the concessional rate on:

(a)  a purchase by a RIOT of marketable securities on its own account in its capacity as a RIOT if:

(i)  it intends to sell marketable securities of the same type during the period of 3 months after the purchase, and

(ii)  the purchase is made for the purpose of hedging risk in respect of an options contract over marketable securities of a type in respect of which options are traded or the price of which is included in the calculation of an index in respect of which options are traded, and

(b)  a sale by a RIOT of marketable securities of the same type as those purchased by it during the period of 3 months before the sale on which duty was payable under paragraph (a), and

(c)  a sale by a RIOT of marketable securities held on its own account in its capacity as a RIOT if:

(i)  it intends to purchase marketable securities of the same type during the period of 3 months after the sale, and

(ii)  the sale is made for the purpose of hedging risk in respect of an options contract over marketable securities of a type in respect of which options are traded or the price of which is included in the calculation of an index in respect of which options are traded, and

(d)  a purchase by a RIOT of marketable securities of the same type as those sold by it during the period of 3 months before the purchase on which duty was payable under paragraph (c).

[31] Section 155 Additional duty on marketable securities held otherwise than for short terms

Omit “registered independent options trader” wherever occurring in section 155 (2).

Insert instead “RIOT”.

[32] Section 155 (2A)

Insert after section 155 (2):

  

(2A)  Duty is payable by a RIOT at the differential rate on:

(a)  a purchase, on the RIOT’s own account, of marketable securities on which concessional duty was paid under section 153A (a) if marketable securities of the same type were not sold by the RIOT during the period of 3 months after the purchase, and

(b)  a sale by the RIOT, on the RIOT’s own account, of marketable securities on which concessional duty was paid under section 153A (c) if marketable securities of the same type were not purchased by the RIOT during the period of 3 months after the sale.

[33] Section 155 (4)

Insert “, 153A” after “153”.

[34] Section 157 Records of sales, purchases and transactions—generally

Omit “, the broker (pursuant to an order received by the broker or effected by the broker on the broker’s own account)” from section 157 (1).

Insert instead “(on the broker’s own account or pursuant to an order received by the broker), the broker”.

[35] Section 157 (3)

Insert after section 157 (2):

  

(3)  Immediately after a sale or purchase of, or a transaction that transfers, marketable securities that is dutiable under this Chapter, or that is exempt from duty under this Chapter, is made by a RIOT on the RIOT’s own account, the RIOT must make a record of the sale, purchase or transaction that shows the following:

(a)  its date,

(b)  the name of the broker or RIOT on the other side of the transaction (if relevant),

(c)  the quantity and full description of the marketable securities,

(d)  the selling or purchase price,

(e)  the amount of duty chargeable,

(f)  in the case of a sale, purchase or transaction that is dutiable at the concessional rate or that is exempt from duty, such particulars as are required to establish that the sale, purchase or transaction is dutiable at the concessional rate or is exempt from duty.

[36] Section 158 Records of sales, purchases and transactions—RIOTS, futures brokers and warrant-issuers

Omit “registered independent options trader” wherever occurring.

Insert instead “RIOT”.

[37] Section 158 (1)

Omit “the options trader”. Insert instead “the RIOT”.

[38] Section 159 Lodgment of returns and payment of duty by brokers and RIOTS

Insert after section 159 (2):

  

(3)  A RIOT must, not later than Thursday of each week, lodge with the Chief Commissioner a return in the approved form of the sales, purchases and transactions required to be recorded under section 157 that have been made by the RIOT during the week ending on the preceding Saturday, and pay to the Chief Commissioner the appropriate amount of duty calculated in accordance with Part 2 in respect of the sales, purchases and transactions required to be included in the return (other than exempt transactions).

(4)  Not later than 7 days after the end of a month in which a RIOT becomes liable to pay duty under section 155, the RIOT must lodge with the Chief Commissioner a return in the approved form of the sales, purchases and transactions for which duty is payable, and pay to the Chief Commissioner the appropriate amount of duty calculated in accordance with Part 2 in respect of the sales, purchases and transactions required to be included in the return (other than exempt transactions).

[39] Section 160 Lodging of returns—RIOTS, futures brokers and warrant-issuers

Omit “registered independent options trader”.

Insert instead “RIOT”.

[40] Section 160

Omit “the options trader”. Insert instead “the RIOT”.

[41] Section 161 Endorsement of transfer as to payment of duty

Insert “or RIOT” after “broker” wherever occurring.

[42] Section 161

Insert “or RIOT’s” after “broker’s” wherever occurring.

[43] Section 161 (5)

Omit “157 (1)”. Insert instead “157”.

[44] Section 221 Eligible mortgages under First Home Plus

Omit section 221 (1). Insert instead:

  

(1)  Duty is payable in accordance with the following paragraphs on an advance secured by an eligible mortgage under Division 1 of Part 8 of Chapter 2 or a mortgage in support of such an eligible mortgage, but only to the extent that the amount of the advances qualifies under section 77 (3) or (4):

(a)  if the property is located in the Metropolitan Area and has a private dwelling built on it:

Consideration payable under the agreement or transfer	Discount on duty
Not more than $200,000	100%
More than $200,000 but not more than $235,000	75%
More than $235,000 but not more than $265,000	50%
More than $265,000 but less than $300,000	25%

(b)  if the property is located elsewhere than in the Metropolitan Area and has a private dwelling built on it:

Consideration payable under the agreement or transfer	Discount on duty
Not more than $175,000	100%
More than $175,000 but not more than $200,000	75%
More than $200,000 but not more than $225,000	50%
More than $225,000 but less than $250,000	25%

(c)  if the property is located in the Metropolitan Area and comprises a vacant block of residential land:

Consideration payable under the agreement or transfer	Discount on duty
Not more than $95,000	100%
More than $95,000 but not more than $110,00	75%
More than $110,000 but not more than $125,000	50%
More than $125,000 but less than $140,000	25%

(d)  if the property is located elsewhere than in the Metropolitan Area and comprises a vacant block of land:

Consideration payable under the agreement or transfer	Discount on duty
Not more than $80,000	100%
More than $80,000 but not more than $90,000	75%
More than $90,000 but not more than $100,000	50%
More than $100,000 but less than $110,000	25%

Note—

“Metropolitan Area” is defined in the Dictionary.

[45] Section 233 Classes of general insurance

Insert at the end of section 233 (4) (b):

  

, or

(c)  until 1 February 2005, insurance under the Debtor Insurance Scheme of the Stock and Station Agents Association.

[46] Section 234 What duty is payable?

Omit “11.5%” from section 234 (1). Insert instead “10%”.

[47] Section 267 Exemptions

Omit section 267 (7A). Insert instead:

  

(7A) Vehicles purchased by war veterans Duty under this Chapter is not chargeable in respect of an application to register a motor vehicle in the name of a veteran who is:

(a)  eligible for 70% or more of the general rate of pension specified in section 22 (3) of the Commonwealth Veterans’ Entitlements Act 1986, or

(b)  eligible for the rate of pension determined in accordance with section 22 (4) of that Act, or

(c)  eligible for the rate of pension determined in accordance with section 23 of that Act, or

(d)  eligible for the rate of pension under section 24 of that Act.

Note—

The rates of pension referred to in subsection (7A) (b), (c) and (d) are known, respectively, as the extreme disablement adjustment rate of pension, the intermediate rate of pension and the special rate of pension for total and permanent incapacity.

[48] Section 278 Department of Housing and Aboriginal Housing Office tenants

Omit section 278 (a). Insert instead:

  

(a)  is a tenant:

(i)  of the Department of Housing, or

(ii)  under the Community Tenancy Scheme administered within that Department, or

(iii)  of the Aboriginal Housing Office,

at the date of the transaction or the date of the first execution of the instrument, and

[49] Schedule 1 Savings, transitional and other provisions

Insert at the end of clause 1 (1):

  

State Revenue Legislation Amendment Act 2000

[50] Schedule 1

Insert at the end of Schedule 1 (with appropriate Part and clause numbers):

  

Part Provisions consequent on enactment of State Revenue Legislation Amendment Act 2000

Insurance duty

The amendments made to section 234 (1) by the State Revenue Legislation Amendment Act 2000 have effect only in relation to premiums paid on or after 23 May 2000 for contracts of insurance and renewals of contracts of insurance that take effect after 1 October 2000.

[51] Dictionary, definition of “index trust”

Insert after paragraph (g) of the definition of index trust:

  

(h)  Barclays Investment Funds Australian Equity Index Fund.

[52] Dictionary, definition of “mortgage”

Insert “sections 282 and 284 and” after “purposes of”.

[53] Dictionary, definition of “registered independent options trader”

Omit the definition.

[54] Dictionary

Insert in alphabetical order:

  

Metropolitan Area means the following:

County of Cumberland

local government area of Wollondilly

City of Wollongong

City of Shellharbour

City of Gosford

local government area of Wyong

City of Blue Mountains.

[55] Dictionary

Insert in alphabetical order:

  

RIOT has the same meaning as a registered independent options trader has in the Business Rules of the Australian Stock Exchange.

Schedule 3 Amendment of Land Tax Management Act 1956

(Section 5)

[1] Section 10 Land exempted from tax

Omit “Education Reform Act” from section 10 (1) (g) (ii).

Insert instead “Education Act”.

[2] Section 10 (1) (q)

Insert after section 10 (1) (p1):

  

(q)  land used solely as a police station,

[3] Section 21A Company title units taken to be strata lots

Insert “or one of 2 or more buildings on the land” after “on the land” in section 21A (1) (a).

[4] Section 21A (1) (b)

Insert “or buildings” after “building”.

[5] Section 21A (2) (a)

Insert “or that building” after “building”.

[6] Section 21A (2) (b)

Insert “, or each such building,” after “building”.

[7] Section 21A (3)

Insert “, or a building,” after “building”.

[8] Section 21A (4)

Omit the subsection. Insert instead:

  

(4)  The Chief Commissioner’s redetermination is to be by reference to:

(a)  the proportion that the floor area of the deemed lot bears to the total floor area that is separately occupied, or capable of being used for separate occupation, in the building, or

(b)  in the case of an entitlement to occupy one of 2 or more buildings, the proportion that the floor area of the deemed lot bears to the total floor area that is separately occupied, or capable of being used for separate occupation, in all of those buildings.

[9] Section 47 Land tax to be first charge on land

Omit “of $15” from section 47 (1A) (b).

Insert instead “determined by the Chief Commissioner”.

[10] Section 65A Alteration of strata unit entitlements

Omit section 65A (6). Insert instead:

  

(6)  For that purpose, the Chief Commissioner may make an assessment, reassessment or compromise assessment of land tax in accordance with Part 3 of the Taxation Administration Act 1996.

[11] Schedule 2 Savings and transitional provisions

Insert “State Revenue Legislation Amendment Act 2000” at the end of clause 1A (1) of Schedule 2.

Schedule 4 Amendment of Pay-roll Tax Act 1971

(Section 6)

[1] Section 3 Definitions

Omit the definition of corporation from section 3 (1). Insert instead:

  

corporation has the same meaning as in the Corporations Law.

[2] Section 3 (1)

Omit the definition of voting share. Insert instead:

  

voting share has the same meaning as in section 9 of the Corporations Law.

[3] Section 10 Exemption from pay-roll tax

Omit “Department of Training and Education” from section 10 (1) (m).

Insert instead “Department of Education and Training”.

[4] Section 16D Grouping of commonly controlled businesses

Omit “section 7 (5) of the Companies (New South Wales) Code” from section 16D (4).

Insert instead “section 50 of the Corporations Law”.

[5] Section 16D (4)

Omit “that Code”. Insert instead “that Law”.

[6] Section 25 Liquidator to give notice

Omit “Companies (New South Wales) Code” from section 25 (7) (b).

Insert instead “Corporations Law”.

[7] Schedule 2 Calculation of pay-roll tax liability from 1 July 1996

Omit paragraph (b) (i) of the definition of R in clause 13 (1) of Part 4.

Insert instead:

  

(i)  commencing on 1 July 1999—6.4, or

(ia)  commencing on 1 July 2000—6.4 for the first 2 quarters of the financial year and 6.2 for the last 2 quarters of the financial year, or

[8] Schedule 6 Savings, transitional and other provisions

Insert “State Revenue Legislation Amendment Act 2000” at the end of clause 1 (1) of Schedule 6.

Schedule 5 Amendment of Premium Property Tax Act 1998

(Section 7)

Section 5 Definitions

Omit “Valuation of Land Act 1916” wherever occurring in the definition of land value.

Insert instead “Part 7 of the Land Tax Management Act 1956”.

Schedule 6 Amendment of Roads Act 1993

(Section 8)

Section 196 Compensation provided in form of land

Omit “No stamp duty is payable under the Stamp Duties Act 1920” from section 196 (2).

Insert instead “No duty is payable under the Duties Act 1997”.

Schedule 7 Amendment of Taxation Administration Act 1996

(Section 9)

[1] Section 9 Reassessment

Insert “and, as a result, the tax liability was assessed at a lower amount than the Chief Commissioner would otherwise have assessed it” after “Chief Commissioner” in section 9 (3) (b).

[2] Section 37 Approval of special tax return arrangements

Insert after section 37 (3):

  

(4)  The calculation of tax by a person other than the Chief Commissioner in accordance with a special arrangement approved under this section is not an assessment.

[3] Section 42 Stamping of instruments

Insert after section 42 (2):

  

(3)  Despite subsection (1), the endorsing of an instrument as referred to in subsection (1) (b) is not evidence of an assessment of the duty payable under the Duties Act 1997 in respect of the instrument.

[4] Section 82 Permitted disclosures—to particular persons

Insert after section 82 (e) (viiib):

  

(viiic)  the Commissioner for the New South Wales Crime Commission, or

[5] Schedule 1 Savings, transitional and other provisions

Insert “State Revenue Legislation Amendment Act 2000” at the end of clause 1 (1) of Schedule 1.