The Victorian Civil and Administrative Tribunal has affirmed the Commissioner’s assessment of duty in respect of 2 interrelated transactions involving a tourist park. In doing so, the Tribunal held that the cabins used in the park were plant and equipment, and not goods that were stock in trade that fell within the exception under s 10(1)(d)(i) of the Duties Act 2000 (Vic).
In February 2011, the taxpayer purchased the subject land for $1.4m. In the same month, a related company purchased the tourist park business. The business consisted of 22 cabins, which were used by guests of the park. The Tribunal noted a report that valued “plant and equipment” to be $1m. The Commissioner assessed duty based on the total value of the land and plant and equipment ie $2.4m. The director of the taxpayer and the related company argued that the cabins were “stock in trade” and that there was an intention to buy and sell cabins in the course of the taxpayer’s business.
The Tribunal found the taxpayer’s business was that of running a tourist park, not the buying and selling of cabins. Accordingly, it held the cabins were plant and equipment, not stock in trade. The Tribunal also did not accept the taxpayer’s claim that goodwill of the business of some $310,000 should be deducted from the total purchase price of the business. In this regard, the Tribunal affirmed the Commissioner’s decision to aggregate the 2 transactions concerning the land and plant and equipment per s 24 of the Duties Act.
(Olivedale Park Pty Ltd v Comr of State Revenue (Taxation) [2012] VCAT 1874, Victorian Civil and Administrative Tribunal, Davis SM, 5 December 2012.)
[LTN 2, 4/1/13]