This matter concerned a transfer of land, from a company, in its capacity as trustee of a unit trust, to the taxpayers. They contended it was exempt as a transfer from a trustee to a beneficiary pursuant to s36(a) of the Duties Act 2000 (Vic) (the Act).
The taxpayers argued that the Commissioner should adopt a wide definition of the term “beneficiary” as it was not defined in the Act. They sought to include “ultimate beneficiaries” in an instance where the beneficiary of the principal trust was a trustee of a superannuation fund. This was so, they argued, because the superannuation fund was not a legal entity, and therefore the Commissioner should “look through” the superannuation fund to find the taxpayers as the beneficiaries of the principal trust, the only people able to take beneficially under the trusts. The Commissioner argued that the taxpayers were not beneficiaries of the principal trust when the trust acquired the property. The Commissioner relied upon s36(b)(ii) of the Act which expressly recognised a beneficiary of the principal trust as being a trustee beneficiary, and therefore the definition of “beneficiary” in s36(b)(i) should exclude a beneficiary as being a trustee beneficiary.
The Tribunal found that the “exemptions are to be applied in accordance with the ordinary and grammatical sense of the words in which they are expressed”. The facts before it did not fall within the exemptions relied upon by the applicants. The Commissioner’s decision that the taxpayers were not beneficiaries of the principal trust at the relevant time was confirmed.
