|Date of judgement||10 August 2015|
|Judge(s)||NS Isenberg, Senior Member|
|Court or Tribunal||Civil and Administrative Tribunal New South Wales|
STATE REVENUE – stamp duty on transfer of land; effect of prior dealings; partition; standing to seek review
Mitchell & ors v Commissioner of State Revenue (Pic) 93 ATC 2142, (1993) 26 ATR 1197
This matter involved duty payable on transfers of two properties among family members in 2014, (a ”Newport property” and a “Turramurra property”) following the deaths of two family members who held interests in the two properties.
The family members had entered into transfers (“the 2011 transfers”) in accordance with a Deed of Partition. In 2014, the same family members entered into other transactions involving the same properties in accordance with a Deed of Family Arrangement (“the Family Deed”) and consequential transfers (“the 2014 transfers”).
Duties Notices of Assessment for ad valorem duty were issued on 25 July 2014 for the 2014 transfers of the Turramurra property (“the Turramurra assessment”) and the Newport property (“the Newport assessment”) on the basis that as the 2011 transfers had been stamped with nominal duty and registered, the Chief Commissioner had no discretion to apply any of the concessional provisions of the Duties Act 1997 (“the Act”). The Applicant objected to the Chief Commissioner’s decision to issue the Newport assessment and the Turramurra assessment which was disallowed.
The Applicant then filed an Application for Review of the Chief Commissioner’s decision (“the Application”).
A preliminary issue for determination was whether the Applicant was entitled to seek a review by the Tribunal of the Turramurra assessment or only the Newport assessment.
The principal issue was whether the Tribunal had power or discretion to make orders pursuant to s. 101 of the Taxation Administration Act 1996 (“the TA Act”) and s.63 of the Administrative Decisions Review Act 1997 (“the ADR Act”) in respect of the Newport assessment, and depending on the determination in relation to the preliminary issue, the Turramurra assessment, and if so, what is the correct and preferable decision having regard to the material before it (s.63 of the ADR Act).
The Chief Commissioner’s submissions were prepared on the basis that the Tribunal was only reviewing the Newport assessment as the Applicant had not filed an amended Application to name all of the parties to the subject transactions and had not provided an authority to act on behalf of all of those parties.
The Applicant believed certain of the parties to the Turramurra assessment would not consent to joining in the Application and he considered himself to be the taxpayer with respect to both transactions because:
On the preliminary issue, the Tribunal found the Applicant was “a person who has been assessed as liable to pay an amount of tax” in relation to the Newport property; and “…a person…who has paid an amount as tax” in relation to the Turramurra property.
Accordingly the Applicant was a taxpayer pursuant to s.3 of the TA Act. As a taxpayer dissatisfied with the Chief Commissioner’s determination of his objection, the Applicant was entitled pursuant to s. 96 of the TA Act to apply to the Tribunal for an administrative review of both assessments.
The Tribunal then considered the principal issue of whether s.30 of the Act can apply to the Family Deed and the 2014 transfers.
Section 30 states that a partition occurs when dutiable property comprised of land in New South Wales held by persons jointly is transferred or agreed to be transferred to one or more of those persons. For the purpose of this section, a partition is taken to be a single dutiable transaction.
All transfers in 2011 had been stamped for nominal duty only. The Chief Commissioner stated that each of the 2014 transfers were not subject to the concessional duty payable and s.63 of the ADR Act and s.30 of the Act did not apply.
The Applicant submitted that the intent of the parties to the transactions was always to reach some form of agreement to enable Judith Webeck and himself to remain living in their current homes. Due principally to misunderstanding between the parties, several transactions were entered into which failed to achieve the requirements of the subject Wills or the objectives of the parties.
The Applicant effectively submitted that the transactions effected by the Deed of Partition in 2011 and the Family Deed in 2014 should be combined because part of the earlier transactions proceeded in error and the intention of the parties could have been achieved by a single transaction in relation to which the s.30 concessions would have applied.
The Chief Commissioner contended that s.30 did not apply because “Each of the parties to the 2014 deed were not joint holders of the properties to which the deed related” and the 2014 Deed did not evince a partition. It was also submitted “there simply is no power or discretion available to the Chief Commissioner and thus the Tribunal to reverse the effect of a contractual arrangement between parties and the relevant duly registered dealings”.
The Tribunal found the transfer of the Newport property satisfied the requirements of s.30(1) as the Applicant held the property jointly with the transferors prior to the transfer. Accordingly the transfer was a partition for the purpose of s.30 of the Act.
The Tribunal found the transfer of the Turramurra property did not satisfy the requirements of s.30(1) as the transferees did not all hold the property jointly with the transferor prior to the transfer.
The Tribunal decided the Duties Notice of Assessment in relation to the Newport property should have been assessed as a partition pursuant to s.30 of the Duties Act 1997. That assessment was set aside and the matter remitted to the Chief Commissioner for determination in accordance with this decision.
The Tribunal was satisfied the Applicant was entitled to seek a review by the Tribunal of the Duties Notice of Assessment in relation to the Turramurra property.
The Tribunal was not satisfied that the Duties Notice of Assessment in relation to the Turramurra property should be assessed as a partition pursuant to s. 30 of the Act. The Tribunal affirmed that assessment.
The Chief Commissioner lodged a Notice of Appeal which was filed on 3 September 2015. The appeal is listed for hearing by the Appeal Panel on 1 December 2015.