Two taxpayers have been unsuccessful before the Victorian Civil and Administrative Tribunal in seeking exemptions under either sections 34 (property vested in apparent purchaser) or 36 (property passing to beneficiaries of a fixed trust) of the Duties Act 2000 (Vic) in relation to a property purchased in the names of the parents of the first taxpayer.

The subject assessment arose from the transfer of the property in October 2011 to the taxpayers from the first taxpayer’s parents. Broadly, the taxpayers submitted that the property was purchased, by the parents, in June 1994, on their behalf; they made all the repayments, on the property, and the parents held the property in trust for them.

The Tribunal was not satisfied, on the balance of probabilities, that the criteria necessary to satisfy the exemption from duty pursuant to either ss 34 or 36 of the Duties Act had been proven.

A key issue was what the Tribunal considered to be inadequate evidence to prove the taxpayers’ case. Among other things, the Tribunal noted there was no evidence that the taxpayers made any financial contribution to the purchase price of the property. The Tribunal also concluded there was no credible or consistent evidence to support the creation of a fixed trust at the time when the property was first purchased. Accordingly, the Commissioner’s decision was affirmed.

(Kloester v Comr of State Revenue [2016] VCAT 16, Victorian Civil and Administrative Tribunal, Jenkins AP, 6 January 2016.)

[LTN 8, 14/1/16]