The NSW Administrative Decisions Tribunal has affirmed the Commissioner’s decision to assess to duty a “custodian trust deed” and to refuse the taxpayer’s claim for the “apparent purchaser” exemption under s 55 of the Duties Act 1997 (NSW).
The background facts are complex but essentially involved the acquisition by a superannuation fund (trustees and members being Mr & Mrs G) of a life interest in a property owned by the G family trust (a discretionary trust for the benefit of Mr & Mrs G and their 2 children, with the taxpayer as trustee). The life interest in the property was measured by the joint lives of the 2 children. The consideration ($575,000) was said to be funded by $520,000 by way of member contributions and $55,000 by way of a vendor limited recourse loan. The various transactions took place on 30 June 2010.
The Tribunal heard details as set out by the Commissioner with respect to a “round robin” passing of a promissory note drawn by the super fund trustees (which promised to pay $520,000 on demand to the taxpayer as trustee of the family trust). The Tribunal was told the note was passed from the super fund trustees to the taxpayer as trustee of the family trust, from the taxpayer to Mr & Mrs G in their personal capacity as a loan, and then handed back to Mr & Mrs G as trustees of the fund as a contribution.
The Tribunal did not accept the taxpayer’s contention that the handing over of the promissory note constituted “money for the purchase” in the sense that it was “consideration in kind”. Essentially, the Tribunal took the narrower view of “money” in the context of the exemption in s 55.
(Landfall Pty Ltd v Chief Comr of State Revenue [2012] NSWADT 270, NSW Administrative Decisions Tribunal, Block JM, 18 December 2012.)
[LTN 3, 7/1/13]