The NSW Administrative Decisions Tribunal has held the “no double duty” concession under s 18 of the Duties Act 1997 (NSW) did not apply to a transfer of a property to 3 taxpayers.
On 17 December 2009, 2 of the taxpayers, a married couple (BZ and JY) entered into a contract to buy a property. They subsequently wanted BZ’s father (JZ) to be a part purchaser. In accordance with the contract, BZ and JY provided a transfer form and direction to the vendors to the effect that the ultimate purchasers of the property would be BZ as to 30%, JY as to 50% and JZ as to 20%. The vendors signed the transfer presented to them by BZ and JY. The contract was completed and a transfer in favour of the taxpayers was registered on about 16 September 2011. The contract was assessed concessionally; however, the Commissioner sought to assess the transfer to ad valorem duty, subject to a 25% duty reduction under the NSW Home Builders Bonus. The taxpayers submitted the transfer was only subject to id=”mce_marker”0 nominal duty as it was in conformity with the agreement or because the purchasers under the agreement and the transferee under the transfer are related persons. In the alternative, the taxpayers submitted duty should be calculated on 20% of the consideration as the transfer involved only a 20% interest in the property moving from BZ to his father.
The Tribunal held the “no double duty” concession did not apply. Broadly, it found the purchasers named in the contract (BZ and JY) were not identical to the transferees named in the registered transfer (the 3 taxpayers), and therefore the transfer was not in conformity with the agreement per s 18(2). It also found that although BZ and JZ were related persons, JY and JZ were not related persons required by s 18(3) at the relevant date.
The Tribunal found the transfer transferred a fee simple in the whole of the dutiable property to the taxpayers. It also held that the contract was neither void nor cancelled and therefore the relief under s 50 of the Duties Act for cancelled agreements did not apply. Accordingly, the Commissioner’s decision was affirmed.
(Zhuang & Ors v Chief Comr of State Revenue [2013] NSWADT 103, NSW Administrative Decisions Tribunal, Isenberg JM, 13 May 2013.)
[LTN 93, 16/5/13]