The Victorian Civil and Administrative Tribunal has affirmed a 75% penalty imposed on a taxpayer in relation to a purchase of an investment property in respect of which the “off-the-plan” concession had been falsely claimed.
The Tribunal heard the taxpayer had met an individual who had offered to sell her an apartment for $340,000 that was said to be worth $542,000 and that he would organise the purchase, the bank loan and the solicitors to act on her behalf. The taxpayer said she did not know at the time that the solicitors were also acting for the vendor.
The Tribunal noted various discrepancies concerning the transaction – namely, the quoted $340,000 price and the $540,000 contract price. There was also confusion concerning a longhand reference to 12 February 2003 as “day of sale” on the contract, which was initialled by the taxpayer. It was common ground that the contract was executed in August 2006.
The relevant document was lodged and stamped with duty of $915 upon a dutiable value of around $46,478. An “off-the-plan” concession under s 21(3) of the Duties Act 2000 (Vic) had been claimed by the taxpayer’s solicitors on her behalf, which was supported by a false declaration made on behalf of the vendor.
It was common ground that the taxpayer was not entitled to the concession in respect of the unit as 100% of the construction works had taken place at the time of the contract. The Commissioner assessed $27,265 duty on the transfer plus $20,448 penalty tax for “intentional disregard” under s 30(2) of the Taxation Administration Act 1997 (Vic) with interest charged at the market and premium rates. The taxpayer accepted she was liable to the tax but contested the penalty tax and interest.
The Tribunal affirmed the Commissioner’s imposition of penalty tax and interest.
(Karci v Comr of State Revenue (Taxation) [2012] VCAT 790, Victorian Civil and Administrative Tribunal, Glover M, 12 June 2012.)
[LTN 121, 26/6]