Pitcher Pharmacy - The Clock is Ticking Article - July 2025

July 2025

Article

The Clock is Ticking: Is Your Pharmacy Ready for Queensland’s Biggest Ownership Shake-Up? Robert Hughes Partner

The Pharmacy Business Ownership Act 2024 (Qld) is set to reshape the landscape of pharmacy ownership in Queensland when it comes into effect in November 2025.

Having received Royal Assent on 28 March 2024, this landmark legislation introduces a modernised framework that aligns more closely with ownership rules in New South Wales and Victoria. With stricter eligibility criteria and a new definition of “material interest,” pharmacy owners must now take proactive steps to ensure their business structures meet the new compliance standards

Changes Under the 2024 Act

Ownership Structure Reviews Between now and the commencement of the 2024 Act, we will work closely with you to review and, where necessary, restructure your ownership arrangements to ensure compliance with the new legislation.

Below is a summary of how various common ownership structures may be affected: 1. Individual / Sole Trader Pharmacists operating as a sole trader must confirm they:

Under the new Act, only individuals or entities that hold a pharmacy business licence will be permitted to own a pharmacy. A licence will be issued only to an eligible person, defined as: A practising pharmacist; A corporation where all directors and shareholders are practising pharmacists; or A corporation where directors and shareholders are a combination of practising pharmacists and close adult relatives (spouse or adult child) of practising pharmacists.

The 2024 Act also introduces the concept of a material interest in a pharmacy business. This includes: Being a shareholder in a company that owns a pharmacy; Being a beneficiary of a trust that owns a pharmacy; Holding any other interest that entitles the person to receive profits or consideration that varies with the performance of the business.

Only practising pharmacists and their close adult relatives may hold a material interest.

Are practising pharmacists; and Hold material interests in no more than five Queensland pharmacies.

The same applies to partnerships of individuals.

2. Discretionary (Family) Trusts All beneficiaries (actual and potential) of a discretionary trust are considered to hold a material interest in the pharmacy business. As such, all trust deeds must be reviewed and amended to restrict beneficiaries to practising pharmacists and their close adult relatives.

We recommend this work be conducted by a solicitor experienced in pharmacy law, and we are happy to assist in arranging this.

3. Private Company with individual shareholder(s) To remain eligible under the 2024 Act: All company directors and shareholders must be practising pharmacists or close adult relatives of a practising pharmacist; and

The majority of shares, and all voting rights, must be held by practising pharmacists.

We will assist in reviewing your company’s structure to ensure these conditions are met.

4. Discretionary Trusts distributing to Companies Companies are not eligible to hold material interests and must be removed as trust beneficiaries. Trusts that wish to continue distributing to companies will need to restructure part or all of the pharmacy business into a company structure. While this may trigger CGT and transfer duty, available concessions may reduce or eliminate these costs.

5. Company with corporate shareholder(s) who may or may not act as trustee of a trust

7. Unit Trusts Unit holders are considered to hold material interests.

Companies (including trustees) cannot hold units, as they are not eligible persons. Affected unit trust will require restructuring to a different entity type or changes to unit holders. This may give rise to CGT and duty implications, though, available concessions may mitigate costs.

Restructuring the unit trust structure may be complex and we will work through this with you.

8. Partnerships Each partner’s ownership structure must independently meet the eligibility and material interest criteria outlined above.

Companies (in any capacity) cannot be shareholders in a pharmacy-owning company. Structures involving corporate shareholders will need to be restructured or have their shareholders replaced. Again, this may trigger CGT and transfer duty, though, available concessions may mitigate costs.

Compliance Timeframe

6. Company with individual shareholder(s) who may act as trustee of a trust

Structures that meet the eligibility requirements under section 214 of the 2024 Act — for example, companies with corporate shareholders — will have 2 years from commencement to comply and apply for a licence.

Private companies may still have trustee as shareholders, provided that: The trustee of the trust is a practising pharmacist or a close adult relative of a practising pharmacist; and The beneficiaries of the shareholder trust are limited to practising pharmacists or a close adult relatives.

Similar to trusts owning the pharmacy directly, all trust deeds for shareholder trusts will require review and amendment to limit the beneficiaries to practising pharmacists and their close adult relatives.

7. Unit Trusts Unit holders are considered to hold material interests.

Companies (including trustees) cannot hold units, as they are not eligible persons. Affected unit trust will require restructuring to a different entity type or changes to unit holders. This may give rise to CGT and duty implications, though, available concessions may mitigate costs.

Similar to trusts owning the pharmacy directly, all trust deeds for shareholder trusts will require review and amendment to limit the beneficiaries to practising pharmacists and their close adult relatives.

2

Most ownership structures must comply with the 2024 Act and submit a pharmacy business licence application within 1 year of the Act’s commencement in November 2025.

Review of Broader Business Requirements In addition to reviewing ownership structures, there are broader business implications to consider both during and after the compliance process. These may include (but are not limited to): Updating business and tax registrations; Amending leases, franchise agreements, and supplier accounts; Meeting banking and finance requirements, including potential refinancing; Strategic tax planning in advance of any ownership changes — including trust distributions, dividends, retained earnings, Division 7A loans, capital gains tax etc.

Act Now Now is the time to act. We strongly encourage all pharmacy owners to begin reviewing their ownership arrangements immediately. Early preparation will help avoid last-minute restructuring, reduce compliance risks, and ensure a smooth transition under the new regulatory framework. Where trust deeds need amendment, we’ll coordinate with pharmacy law specialists on your behalf. Acting early will help avoid disruption and ensure you’re fully compliant within the required timeframe.

2022 We look forward to assisting you through this transition and ensuring your continued compliance under the new regulatory

EDITION 3

framework.

Pitcher Partners

Norman Thurecht Managing Partner e. nthurecht@pitcherpartners.com.au

Mark Nicholson Partner e. mnicholson@pitcherpartners.com.au

Making business personal

Felicity Crimston Partner e. fcrimston@pitcherpartners.com.au

Robert Hughes Partner e. rhughes@pitcherpartners.com.au

Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539.

Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

pitcher.com.au