The Tasmanian Supreme Court has affirmed that a transfer of plant and equipment of a school to a taxpayer was not a “gift” and therefore denied the exemption under s 53(n)(i) of the Duties Act 2000 (Tas).
The property was transferred by an incorporated association of the school to the taxpayer by way of a deed dated 23 December 2010. The taxpayer contended the transaction amounted to a gift and therefore was not dutiable. The Commissioner disagreed and assessed duty of around $132,000 based on a dutiable value of $3.4m. The deed provided there was no consideration payable for the transfer. However, it provided for the association to be released from loans (around $3.8m) it owed the taxpayer. The deed also provided for the association to be indemnified against claims for salary, wages, overtime, allowances and leave made by employees of the school. The association’s liabilities for employee entitlements were estimated to be around $500,000 to $800,000 at the time of the transaction.
The Supreme Court was not satisfied on the balance of probabilities that the release of the loan debts and the indemnities relating to employee entitlements were independent of the arrangement for the transfer of the plant and equipment. It was not satisfied that the transfer amounted to a gift for which the association received no consideration or material benefit by way of return. Accordingly, it held the transaction was dutiable.
(Roman Catholic Church Trust Corporation of the Archdiocese of Hobart v Comr of State Revenue [2012] TASSC 43, Tasmanian Supreme Court, Blow J, 4 July 2012.)
[LTN 130, 9/7]