The NSW Administrative Decisions Tribunal has held that the stamp duty exemption following a “break-up of marriage” under s 68 of the Duties Act 1997 (NSW) applied in relation to an ex-husband’s transfer of his interest in a family home to the taxpayer, but not the exemption for “transfers to married couples” under s 67 of the Act, in relation to the transfer of that interest to the taxpayer’s current husband.
The background facts are complicated, but relevantly, the taxpayer’s ex-husband (Mr K) in 2010 had requested that his name be removed from the title of the family home – at that time, the interest in the home was divided as follows: Mr K and the taxpayer – 99/200 shares each; current husband (Mr H) – 2/200 shares. Broadly, the parties agreed to a transfer of Mr K’s share to the taxpayer, and then a transfer from the taxpayer to Mr H, with a view that the interest in the property would be shared between the taxpayer and Mr H as tenants in common. However, there was an issue with the stamping of relevant documents which ultimately resulted in the Commissioner issuing a stamp duty assessment to both the taxpayer and Mr H on the basis there was a transfer from Mr K to both of them and that this was not an exempt transaction.
The Tribunal found there were 2 transactions rather than a “single composite transaction” as claimed by the Commissioner. The first transaction was between Mr K and the taxpayer and that transfer was exempt pursuant to s 68(1). The second transaction was the transfer by the taxpayer of 50% of her interest she acquired under the first transaction to Mr H. However, the Tribunal said the strict requirement under s 67 that the property would be held by a married couple as joint tenants in common equal shares was “not clearly satisfied”. As a result, it held Mr H was liable to duty in respect of the share of the property that was transferred to him by the taxpayer (ie 49.5/200 share), which represented 50% of Mr K’s share of the property. Accordingly, the Tribunal set aside the assessment and remitted the matter to the Commissioner to issue an assessment to Mr H.
(Hannagan v Chief Comr of State Revenue [2012] NSWADT 15, NSW Administrative Decisions Tribunal, Verick JM, 8 February 2012.)
[LTN 27, 10/2]