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Date of judgement | 8 December 2016 |
Proceeding number | 1610260 |
Judge(s) | NS Isenberg, Senior Member |
Court or Tribunal | New South Wales Civil and Administrative Tribunal |
REVENUE LAW – Duties Act 1997 – double duty – reassessment - estoppel – section 18(3)
B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187, (2008) 74 NSWLR 481
BBLT Pty Ltd v Chief Commissioner of the Office for State Revenue [2003] NSWSC 1003
Commissioner of State Revenue v Paspaley [2008] NSWCA 184
Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25
Rowntree Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 141
This was an application for review of the decision of the Chief Commissioner of State Revenue (“Chief Commissioner”) to reassess an undated real property transfer form (“the Transfer”) to ad valorem duty of $22,940 in respect of the transfer of 211/55 Harbour Street, Mosman (“the Property”), from Toby Rowley Browne, Julie Anne Brown, Paul Derek Buckley and Jennifer Jean Buckley (together, “the Vendors”) to the Taxpayer.
The key issue in these proceedings was whether the Transfer was eligible for concessional duty of $10 under s.18(3) of the Duties Act 1997.
Pursuant to s.50 of the Civil and Administrative Tribunal Act 2013, and by way of agreement between the parties, this matter was heard on the papers (ie the Tribunal dispensed with the need for a hearing and determined the matter on the basis of the written submissions and evidence lodged with the Tribunal).
On 17 March 2015, a contract for the sale of land in relation to the Property (“the Contract”) was entered into between the Vendors and “FB Transitions Pty Ltd as trustee for Happy Days Custody Trust” as purchaser. The Contract had a completion date of 42 days after the date of the contract, being 28 April 2015. The purchase price was $610,000. Duty of $22,940 was assessed in relation to the Contract on 30 April 2015 and was paid.
After 17 March 2015 and before the proposed settlement date of 28 April 2015, Westpac, from whom the purchaser intended to borrow money in relation to the purchase, indicated that it did not accept FB Transitions Pty Ltd as custodian, and required that a different entity hold the Property.
Consequently, on 7 April 2015:
The Transfer was originally stamped by the Chief Commissioner with nominal duty of $10 pursuant to s.18(3) of the Duties Act 1997 on 30 April 2015.
Following a review of the Transfer, the Chief Commissioner then issued a Notice of Assessment in relation to the Transfer, for ad valorem duty of $22,940 payable, on the basis that the concession in s.18(3) of the Duties Act 1997 did not apply.
Pursuant to the Duties Act 1997 both:
are transactions which give rise to duty.
Accordingly, there were two dutiable transactions in this matter, being the Transfer and the Contract, and each independently gives rise to a liability for duty.
Section 18 of the Duties Act 1997 is intended to prevent “double duty” being charged in certain circumstances. S.18(3) provides:
“The duty chargeable in respect of a transfer of dutiable property that is not made in conformity with an agreement for the sale or transfer of the dutiable property is $10 if:
The Chief Commissioner accepted that s.18(3)(a), (b) and (c) of the Duties Act 1997 were satisfied in this case, and so the key issue in dispute was whether s.18(3)(d) was satisfied. In this regard, s.18(3)(d)(ii) was the relevant provision to consider as FB Transitions Pty Ltd purchased the Property as a trustee.
The Taxpayer submitted that the Chief Commissioner was not entitled to payment of double duty on the following four grounds:
The Chief Commissioner submitted, in response to each of those grounds:
Senior Member Isenberg found that the concession under s.18 of the Duties Act 1997 could not apply to the Transfer. In relation to the Taxpayer’s submissions, Senior Member Isenberg:
Senior Member Isenberg affirmed the Chief Commissioner’s decision.
Happy Days Property Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 289