Three taxpayers have been successful before the Qld Civil and Administrative Tribunal in a matter arguing against the aggregation of dutiable transactions under s 30 of the Duties Act 2001 (Qld).
The taxpayers were beneficiaries of a testamentary discretionary trust. The trust’s assets included 2 residential properties – the first valued at $560,000 and the second at $650,000.
- The trustees resolved to make an in specie distribution of the first property to the taxpayers and the second property to another group of beneficiaries. The 2 groups of beneficiaries were related as cousins and the properties were contiguous lots. The transfers were pursuant to the terms of a will.
- A trust agreement was entered into by the trustees and the beneficiaries for the transfer of the properties.
- Transfers were also prepared in respect of each property to the relevant transferees.
- [The Commissioner assessed the] duty in respect of the agreement to transfer the first property set out in the trust agreement … on the basis that s30 applied to the 2 transactions.
- The effect of this was that duty was calculated on the total value of the 2 properties with a credit for the duty to be paid in respect of the second property.
- The taxpayers objected to the assessment of duty on several grounds including that s 30 should not have been applied.
The Tribunal held the transaction, the subject of the application, should not be aggregated under s 30 with any other transaction and that it should be assessed for duty accordingly [because it was not ‘substantially 1 arrangement’ – see s30(1) below]. The Tribunal said, in this case, there was one agreement, which set out 2 separate arrangements between the trustees and each of the separate sets of beneficiaries in regard to separate lots. Further, it said the transactions were not conditional on each other and the properties were not to be used for any common purpose. [See s30(3) below.]
(Rawlings & Ors v Comr of State Revenue [2015] QCAT 010, Qld Civil and Administrative Tribunal, Allen M, 15 January 2015.)
[LTN 19, 30/1/15]
Extract from the Duties Act 2001 (Qld)
30 Aggregation of dutiable transactions
(1) This section applies to dutiable transactions that together form, evidence, give effect to or arise from what is, substantially 1 arrangement.
(2) For assessing transfer duty on each of the dutiable transactions, the transactions must be aggregated and treated as a single dutiable transaction.
(3) For subsection (1), all relevant circumstances relating to the dutiable transactions must be taken into account in deciding whether they together form, evidence, give effect to or arise from what is, substantially 1 arrangement.
(4) For subsection (3), relevant circumstances include the following—
(a) whether the transactions are contained in 1 instrument;
(b) whether any of the transactions are conditional on entry into, or completion of, any of the other transactions;
(c) whether the parties to any of the transactions are the same;
(d) whether any party to a transaction is a related person of another party to any of the other transactions;
(e) the time over which the transactions take place;
(f) whether, before the transactions take place, the dutiable property the subject of the transactions was used together, or dependently with one another, by the transferor or transferors;
(g) whether, after the transactions take place, the dutiable property the subject of the transactions will be used together, or dependently with one another, by the transferee or transferees.
(5) Transfer duty imposed on the dutiable transaction aggregated under this section must—
(a) be assessed on the total of the dutiable values of the transactions when the liability for transfer duty for each of the transactions arose; and
(b) be apportioned between the transactions as decided by the commissioner.
(6) Each party to each of the dutiable transactions must, when lodging the instrument or transfer duty statement relating to the transaction, give notice to the commissioner stating details known to the party about—
(a) all of the dutiable property included or to be included in the arrangement mentioned in subsection (1); and
(b) the dutiable value of each dutiable transaction.
(7) This section does not apply to a dutiable transaction to the extent that it relates to an exchange of dutiable property.