The NSW Court of Appeal has dismissed the appeal of 5 taxpayers against an earlier decision which had refused their claim for the primary production land tax exemption for the relevant years under s 10AA of the Land Tax Management Act 1956 (NSW).

The subject lands were used for cattle grazing by the first taxpayer, the activities of which were carried out by the second taxpayer (Mr G). The taxpayers (as respective land owners) received land tax assessments covering various years between 2006 and 2010. It was not in dispute that the lands were used for primary production. In the years in question, the herd was up to about 40 cattle. The total value of the subject lands in 2009 was around $26.6m. At first instance, the NSW Supreme Court concluded that the first taxpayer’s primary production use of the subject lands did not satisfy the commerciality test in s 10AA(2)(a). The primary judge considered that cattle operations did not have the characteristics of importance, size, depth, bulk, weight, seriousness, quality, intensity and prominence that would be indicative of a substantial commercial purpose or character”.

The Court of Appeal held the taxpayers had failed to demonstrate any error on the part of the primary judge in concluding that the prerequisites of s 10AA(2)(a) had not been satisfied. Accordingly, the taxpayers’ appeal was dismissed.

(Maraya Holdings Pty Ltd & Ors v Chief Comr of State Revenue [2013] NSWCA 408, NSW Court of Appeal, Meagher, Emmett and Leeming JA, 9 December 2013.)

[LTN 239, 10/12/13]

 

About the author