This case concerned the imposition of land rich duty under s79 of the Duties Act 2000 (Vic) ( the Act) following the taxpayer’s acquisition of shares in two private companies which were “land rich”; and whether the discretion in s85(2) of the Act should be applied to exempt the acquisitions from duty.
The taxpayer submitted that as the transferor of all of the shares in each of the two land rich companies also held all of the shares in the taxpayer, there was no change in the ultimate “economic” ownership of the land.
The Tribunal member thought that this fact was highly relevant to a favourable exercise of the exemption, however, it was outweighed by the conduct of the taxpayer and, much more so, the taxpayer’s accountants it engaged.
In its decision delivered on 8 December 2011, the Tribunal found that although the taxpayer’s actions were “less than exemplary”, on the facts, it had met the “reasonable care” standard to warrant remission of penalty tax and premium interest. The assessments were set aside for the recalculation of penalty tax and premium interest, but were otherwise affirmed.
