Unpaid tax interest (assessed interest and late payment interest) for transfer duty self assessors

UTI has 2 components:

1. Assessed interest—calculated at the time a transaction is assessed and lodged in OSRconnect.
2. Late payment interest (LPI)—calculated after the transaction has been lodged in OSRconnect.
   

Whether assessed interest or late payment interest applies to a particular transaction will depend on the following dates.

• Lodgement due date is 30 days from the date of the transaction or contract unconditional date.
• Lodgement non-compliance period is the number of days between the lodgement due date and the actual lodgement date.
• Actual lodgement date is the date when a transaction statement is:
  • lodged in OSRconnect
    or
  • received in our office (if you are a paper lodger).
• Transaction payment due date is 14 days after you lodge the transaction statement.

If a transaction is lodged late (i.e. after 30 days from either the date of the transaction or when it became unconditional), assessed interest may apply when you lodge the transaction. The start date of the assessed interest is worked out by deducting the lodgement non-compliance period from the transaction payment due date.

Example

A transaction is lodged in OSRconnect on 14 October 2011 (50 days late—should have been lodged on 25 August 2011). The payment due date is 28 October (14 days after date of lodgement [14 October]). The assessed interest start date is 9 September 2011 (payment due date [28 October] minus non-compliance period [50 days]). Therefore, 36 days of interest will be assessed at the time of the assessment.

Illustrated example

Contract date 01 Jul 2011	Unconditional date 26 Jul 2011	Lodgement due date 25 Aug 2011	Transaction due date 28 Oct 2011	UTI start date 9 Sep 2011
Actual lodgement date 14 Oct 2011	No UTI applies up to 25 Aug 2011	Lodgement non-compliance period from 26 Aug 2011 to 14 Oct 2011	Assessed interest/LPI applies from 9 Sep 2011 to  14 Oct 2011

Transactions submitted through OSRconnect on time (i.e. within 30 days of transaction or unconditional date) will only accrue LPI after the payment due date. This interest accrues on a daily basis and is applied each Sunday until the assessment is paid in full.

However, where a transaction has been lodged late, LPI is applied on the first Sunday following the date the transaction was submitted through OSRconnect, and then each Sunday thereafter until the assessment is fully paid. This is regardless of the 14-day payment period.

Using the previous example—where the transaction was lodged on 14 October (50 days late)—LPI would apply on Sunday 16 October (including LPI from 14 October). If full payment of duty and assessed interest was made on Friday 14 October, no further LPI would apply.

Note: The UTI start date will be shown on your lodgement confirmation statement if you lodge through OSRconnect. This could either be the date from which:

• assessed interest is applied (if the transaction is lodged late)
  
  or
  
• LPI will start (if the transaction is lodged on time).

Illustrated example

Contract date 01 Jul 2011	Unconditional date 26 Jul 2011	Lodgement due date 25 Aug 2011	Transaction due date 28 Oct 2011	UTI start date 9 Sep 2011
Actual lodgement date 14 Oct 2011	No UTI applies up to 25 Aug 2011	Lodgement non-compliance period from 26 Aug 2011 to 14 Oct 2011
Payment received 28 Oct 2011	Assessed interest from 9 Sep 2011 to 14 Oct 2011	LPI applied from 14 Oct to 23 Oct 2011

The above illustrated example demonstrates how assessed interest or LPI may be applied in most circumstances. This does not apply to early or weekend lodgements.

Note: OSRconnect cannot forecast if payment will be made on time, so any LPI applied after the actual lodgement date will not appear on the Form 12.6.

The following scenarios illustrate when assessed interest and LPI may be applied on a transaction. They are based on a first home concession claim for 100% interest acquired.

Contract date  01 Jul 2011	Unconditional date  26 Jul 2011	Consideration           $505,000.00		Duty payable  $1,050.00
	Scenario 1 Lodged early 13 days	Scenario 2 Lodged on time Paid late  received after 1st Sunday following UTI start date	Scenario 3 Lodged late 4 days Paid late  received after 1st Sunday following UTI start date	Scenario 4 Lodged late 50 days Paid late received 14 days after 1st Sunday following lodgement
Lodgement due date (30 days from transaction or unconditional date)	Thursday 25 Aug 2011	Thursday 25 Aug 2011	Thursday 25 Aug 2011	Thursday 25 Aug 2011
Actual lodgement date	Friday 12 Aug 2011	Thursday 25 Aug 2011	Monday 29 Aug 2011	Friday 14 Oct 2011
Transaction (payment) due date	Friday 26 Aug 2011	Thursday 08 Sep 2011	Monday 12 Sep 2011	Friday 28 Oct 2011
Lodgement non-compliance period	0 days	0 days	4 days	50 days
Does assessed interest apply? If so, how many days (up to actual lodgement date)?	No	No	No	Yes—36 days from 9 Sep 2011
Paid to OSR	Friday 26 Aug 2011	Wednesday 14 Sep 2011	Friday 16 Sep 2011	Friday 28 Oct 2011
Does LPI apply (after actual lodgement date)? If so, how many days?	No	Yes—3 days from 9 Sep 2011	Yes—3 days from 9 Sep 2011	Yes—9 days from  15 Oct 2011
First Sunday LPI is applied (if applicable), and weekly thereafter	Sunday 28 Aug 2011	Sunday 11 Sep 2011	Sunday 11 Sep 2011	Sunday 16 Oct 2011
Last Sunday LPI is applied (if applicable)	Sunday 28 Aug 2011	Sunday 11 Sep 2011	Sunday 11 Sep 2011	Sunday 23 Oct 2011
Total amount payable	$1,050.00	$1,051.11	$1,051.11	$1,066.65

Note: The UTI rate of 13% for the 2011–12 financial year has been used in these scenarios.

Scenario 1—Important to note: If your transaction is lodged early (i.e. before the 30 days lodgement due date), you will have 14 days from the actual lodgement date to pay.

Scenario 2—LPI was only applied because payment was late. LPI was applied on the Sunday after the due date for Friday, Saturday and Sunday (even though payment was received on Wednesday the following week, the ‘weekly posting of interest each Sunday’ rule applies).

Scenario 3—LPI was only applied because payment was late. There was no assessed interest because the actual lodgement date was before the date interest starts to accrue (i.e. 9/09/11). LPI was only applied for Friday, Saturday and Sunday following the UTI start date (even though payment was received the next week, the ‘weekly posting of interest each Sunday’ rule applies).

Scenario 4—UTI was applied because both lodgement and payment were late. There were 36 days of assessed interest at the time of the assessment and, after the actual lodgement date, a further 9 days of LPI up until the second Sunday (i.e. 23/10/2011). (Even though payment was received on 28/10/2011, the ‘weekly posting of interest each Sunday’ rule applies.)