Queensland pharmacy ownership update: Clarity on indirect ownership

What is the issue?

In March 2024, the Act was passed by Parliament. The aim of the Act is to refine and modernise pharmacy ownership rules in Queensland and to align them with other Australian states.

The Act introduces a raft of new changes to pharmacy ownership rules in Queensland which are due to commence no earlier than 1 July 2025. A summary of the Act and key changes can be found in our December 2024 update.

With respect to pharmacy ownership in Queensland, the Act includes two key tests:

1.  Eligible Person Test

The Eligible Person Test requires that a person must not own a pharmacy business (and will not be permitted to hold a pharmacy business licence) unless the person is:

A close adult relative is defined in the Act to mean a spouse or adult child of the pharmacist.

While the Eligible Person Test ensures that the directorship and shareholdings of corporate pharmacies are limited to registered pharmacists and their close adult relatives, the Act does not clarify whether the Eligible Person Test is satisfied in circumstances where a registered pharmacist (or their close adult relatives) holds shares in a corporate pharmacy as trustee for a family trust. 

2.  MATERIAL INTEREST Test

The Material Interest Test provides that only practising pharmacists and their close adult relatives may hold a “material interest” in a pharmacy business. A material interest is defined in the Act to include:

Unfortunately, the Material Interest Test does not provide clarity on whether a trust can hold shares in a corporate pharmacy. It only addresses scenarios where a beneficiary of a trust holds a material interest where the trust owns the business, not where the trust is a shareholder of a company that owns the business.

Due to these drafting issues with the Act, some advisors and owners have taken the view that if a practising pharmacist holds shares in a corporate pharmacy as trustee for a trust, regardless of who the potential beneficiaries of that trust are, then the Eligible Person Test and Material Interest Test may still be satisfied.

What is the impact of the Consultation Paper and the proposed Bill?

Following identification of these drafting deficiencies, the Queensland Government published the Consultation Paper. The Consultation Paper acknowledges that the current drafting conflicts with the intention of the Act: that ownership of, and interests in, pharmacy businesses should be limited to practising pharmacists and their close adult relatives.

To address the issues, the Consultation Paper provides that the proposed Bill will amend the Act to make clear that a shareholder in a corporate pharmacy cannot hold their shares on trust for other persons, unless those other persons are practising pharmacists and close adult relatives of practising pharmacists. We anticipate that the Bill will achieve this through an amendment to the Material Interest Test in the Act.

The Consultation Paper and proposed Bill were subject to public consultation, which ended on 28 March 2025.

What is the impact of the Consultation Paper and the proposed Bill?

While the Consultation Paper and proposed Bill place limitations on who can be a potential beneficiary of a trust that holds an interest in a pharmacy business, they also provide welcome clarity for pharmacy owners preparing for the commencement of the Act.

A critical question remains as to whether the Queensland Government will be in a position to introduce and pass the proposed Bill before the new Act commences. We suspect this will be the case, although it does create uncertainty for existing pharmacy owners, many of whom are currently seeking advice or undertaking restructures to ensure compliance.

Given the Consultation Paper and the proposed Bill, pharmacy owners who utilise trust structures (whether at the shareholder level or otherwise) should ensure their trust deeds are reviewed to confirm that the scope of beneficiaries complies with the Act and the Material Interest Test.