A taxpayer has been successful before the NSW Civil and Administrative Tribunal in obtaining a marriage break-up transfer exemption from stamp duty under s 68 of the Duties Act 1997 (NSW).
- The taxpayer married Mr H in 2003.
- The couple occupied premises in Greenacre owned by Mr H.
- On 3 November 2011, the taxpayer and Mr H made an oral agreement in order to divide their property as a consequence of the break-down of the marriage under Islamic law.
- The next day, contracts for the sale of the property were exchanged and Mr H subsequently moved to Victoria.
- In April 2012, the Commissioner assessed the transfer for stamp duty.
- In May 2012, the taxpayer and Mr H entered into a financial agreement for the transfer of the property pursuant to s 90C of the Family Law Act 1975 (Cth).
- In July 2012, after the taxpayer fell pregnant to Mr H when he visited from interstate, she remarried him under Islamic law.
The taxpayer argued that she was entitled to the exemption from duty under s 68(1) of the Duties Act on the basis that, relevantly, the property was transferred in relation to a marriage that, in the opinion of the Commissioner, had “broken down irretrievably” and the transfer was effected by or in accordance with: (a) a financial agreement made under s 90C of the Family Law Act; or (b) an agreement that the Commissioner is satisfied had been made for the purpose of dividing matrimonial property as a consequence of the breakdown of the marriage.
The Tribunal found that the taxpayer’s argument in para (a) failed because a transfer made before a family law agreement could not be “effected by or in accordance with” the agreement.
In relation to the second argument, the Tribunal accepted the oral evidence given by the taxpayer and, standing in the Commissioner’s shoes, was satisfied that, at the time of the transfer, the marriage had irretrievably broken down according to the religious beliefs of the taxpayer. The Tribunal observed that “the [taxpayer’s] evidence that she remarried [Mr H] in order that her baby would be born in the course of a marriage, is entirely consistent with her evidence that as at 4 November 2011 she held the belief that the marriage between her and [Mr H] had ended as they had been divorced. There is no evidence of any other reason for the remarriage to have taken place.”
(Kamareddin v Comr of State Revenue [2016] NSWCATAD 21, NSW Civil and Administrative Tribunal, Isenberg SM, 5 February 2016.)