In a decision handed down on Fri 29.6.2012, the Victorian Court of Appeal has allowed the Commissioner’s appeal against an earlier Victorian Supreme Court decision concerning the “land rich” provisions in Pt 2 of Ch 3 of the Duties Act 2000 (Vic).
The Victorian Supreme Court had upheld a taxpayer’s appeal against the imposition of duty which had been levied on the basis that the taxpayer’s acquisition of all the issued shares of Latrobe Valley BV (LVBV) on 17 October 2005 was a “relevant acquisition” of an interest in a “landholder” that was “land rich”. The Supreme Court had decided that LVBV was not land rich as the value of the land holding did not comprise 60% or more of the unencumbered value of all its property, pursuant to s 71(2)(b) of the Act.
However, the Court of Appeal found that, at the date of valuation, LVBV was “land rich” for duty purposes. The Court of Appeal ordered that, save in respect of the imposition of penalty tax, the taxpayer’s appeal from the Commissioner’s determination be dismissed.
(Comr of State Revenue v Snowy Hydro Limited [2012] VSCA 145, Victorian Court of Appeal, Maxwell P Redlich JA and Robson AJA, 29 June 2012.)
[FJM Note: The loss of this case at first instance, may well have contributed to the Victorian Government’s decision to introduce the ‘land-holder’ scheme of duty in lieu of the ‘land-rich’ system, that appeared to have failed in this case – though in the month this legislation received Royal Assent, the first instance decision was also over-turned.]
[LTN 124, 29/6]