The NSW Supreme Court has allowed a taxpayer’s appeal against a duty assessment after finding that the transfer of property had been cancelled and that the relief under s 50A(1) of the Duties Act 1997 (NSW) was applicable in the circumstances.
The matter concerned 3 adjacent lots for which the taxpayer’s husband was the registered proprietor. The husband sought to transfer one of the lots, the one on which he and [the] taxpayer lived on, to both himself and the taxpayer. An instrument was prepared which included all 3 lots. The couple then sought to refinance all 3 lots with their bank. The instrument (which had not been lodged for duty assessment) along with mortgage documents were then registered with the Land and Property Information Management Authority (LPMA) by the bank. However, after becoming aware of a stamp duty issue with the instrument, the couple sought to deregister the documents. The documents were then deregistered by the LPMA, which then informed that the titles have been returned to the “pre registered state”. The Commissioner allowed an exemption for the transfer of the home, but assessed the transfer of the other 2 lots. The amount in dispute totalled some $47,000.
The Court held the relief under s 50(A)(1)(a) applied in the circumstances. The Court said the evidence had established that the intended operation of the instrument was to effect the transfer from the husband to himself and the taxpayer as joint tenants of their home with the benefit of an exemption. The Court was of the view that the instrument had been cancelled within the meaning of s 50A(1)(a) and that abandonment had been confirmed when the documents were withdrawn by the LPMA. It also found the property had not been transferred to the transferees based on the LPMA’s deregistration of the documents, which the Court said “restored the status quo ante with the result that the [taxpayer] and [her husband] were divested of the title evidenced by registration of the instrument”. Accordingly, the Court held the assessment should be set aside.
(Trethowan v Chief Comr of State Revenue [2013] NSWSC 576, NSW Supreme Court, Nicholas J, 17 May 2013.)
[LTN 96, 21/5/13]