There are potentially significant penalties for non compliance with the new Act, so it’s worth reviewing and noting some of the key issues around pharmacy ownership and your pharmacy ownership structure. Remember, this article does not provide advice specific to you, so it’s also advised to discuss your situation further with your accountant and/or legal advisor.

It is our understanding that all existing pharmacy owners will be required to apply for a licence to be compliant under the new Act within a year of the licencing provisions coming into effect. This applies to everyone who owns a pharmacy business in Queensland. In addition, any new pharmacies or pharmacy transactions occurring past the commencement date of the licencing provisions under the new Act will be required to also apply for a licence.

We also understand that it has been established that these licencing provisions are likely to officially come into effect on 1 July 2025, meaning that pharmacy owners will have one year to apply for a licence with the deadline to meeting these compliance regulations falling on 30 June 2026.

There is an additional transitional period that applies to eligible, existing pharmacy owners in addition to the above timeline to 30 June 2027. This mainly relates to pharmacists who hold their ownership interest in pharmacy businesses through corporate shareholders and beneficiaries but is also extended to pharmacists which currently have a non-practising registration and have an ownership interest in a pharmacy business.

Who is eligible to own a pharmacy?

These are the key changes to note, if you own a Queensland based pharmacy business. Section 10 of the new Act states the following as being eligible to own a pharmacy:

• a practising pharmacist
• a corporation whose directors and shareholders are all practising pharmacists
• a corporation:
  • whose directors and shareholders are a combination of practising pharmacists and close adult relatives (spouses or adult children) of practising pharmacists, and 
  • in which a majority of shares, and all voting shares, are held by practising pharmacists
• a friendly society that, on 29 April 2005, carried on a pharmacy business in Queensland or another State
• a friendly society that is an amalgamation of two or more friendly societies, where both friendly societies carried on businesses in Queensland or another State on 29 April 2005
• Mater Misericordiae Ltd ACN 096 708 922

One of the important things to note about these rules are that in order to hold an interest in a pharmacy in compliance with the new Act, you in your own right or as trustee for a trust must be a practising pharmacist, or a corporation whose directors and shareholders are practicing pharmacists, or considered to be a material interest holder. Note that a ‘practicing pharmacist’ under the new Act is considered to be an individual who holds a general registration under AHPRA and upholds the requirements and obligations of that accreditation. There are also specific rules over what material interest holders are and who may have a material interest in a pharmacy. Some key points for consideration here are:

• If your pharmacy ownership is under a trust structure, then both the trustee or beneficiary of the trust is considered to have a material interest holder in the business.
• If your pharmacy ownership is under a corporate structure, all directors and shareholders must be natural persons i.e. they cannot be owned or held by another company or on trust for another person, even if those shares or interests are held by an eligible material interest holder.
• Only a practising pharmacist, or a close adult relative of a practising pharmacist who owns a pharmacy business may have a material interest in that business. This, for example, may mean a spouse or child of the pharmacist.
• Any owner, material or otherwise, must be 18 years or older.

The last point in this list, relating to being 18 years or older, must be carefully considered. If you have children under 18 who are beneficiaries of the trust or a discretionary trust, then your ownership structure may not comply with the new legislation. No one under the age of 18 can derive benefit from a pharmacy business. Within the one year licence application timeframe, you will need to review your trust deeds to ensure they are compliant under the new Act. We will follow this closely, as the Queensland Pharmacy Business Ownership Council implements the requirements of the Act.

Before taking action, please be mindful that any significant changes to a trust deed may cause a re-settlement of a trust which can carry some significant tax implications, such as Capital Gains Tax and associated costs such as Stamp Duty. Please reach out to your tax advisor or solicitor before doing so.

How many pharmacies can you own?

The new Act limits the number of pharmacies that a pharmacist or corporation can own to a maximum of five, unless you are considered to be a friendly society under the new Act, which would allow you to own six.

Queensland pharmacy ownership outlook – what next?

In the coming year, those who own a pharmacy in Queensland will be required to submit an application to obtain a licence from the Queensland Pharmacy Business Ownership Council, the details of which we understand have not been released. We anticipate that due to the new requirement for being a practising pharmacist, retiring pharmacists who continue to own an interest in a pharmacy may need to reconsider their ownership and / or retirement plans. This may lead to more pharmacy transactions.

Trust deeds will also cause issues, and we’ll see ownership restructuring occurring too. Talk to your advisor to ensure that any changes to legal documentation is thoroughly considered from both a legislative compliance and tax point of view. You don’t want to trigger any unwanted Capital Gains Tax events.

Don’t panic! This article aims to raise awareness and there are timelines set out that provide time for proper consideration. That said, you will need to take action within the timeframe, so please be mindful of any implications this may have on your business and take the time to look at your current business structures.

This article does not contain a comprehensive guide to the new Act, so please speak with your advisor or solicitor and review the details released by Queensland Health here.

About the author

Serry Leombruno is an Assistant Manager at Holman Hodge. He works with a stable of pharmacy clients, supporting tax and compliance, management accounting and advisory around matters such as restructures, cashflow and transactions. Coming from commerce, with a pharmacy retail background, he has an understanding of system and process, providing insight into business improvement.