White Rock Properties Pty Ltd v Commissioner of State Revenue [2015] VSCA 77
Three properties were held by the trustees of five testamentary trusts as tenants in common. The trustees transferred the properties to the taxpayer pursuant to a partnership agreement. The interests in the partnership were held by the trustees in proportion to the shares they originally held in the properties. Under the partnership agreement, the taxpayer had the power to sell, develop, lease and mortgage the properties subject to some limited restrictions.
The taxpayer argued the transfers were not dutiable by application of s35 of the Act (for “transfers to and from a trustee or nominee”, or “bare trusts”), s33(3) of the Act (for transfers bought about by “change in trustees”), or alternatively that the dutiable value was nil or nominal (as the equitable estate was retained by the testamentary trustees on behalf of the beneficiaries).
The taxpayer was unsuccessful in the Supreme Court and appealed to the Court of Appeal.
- The Court of Appeal found for the Commissioner on all grounds.
- The Court of Appeal has affirmed the Commissioner’s interpretation of ss.35 and 33(3). The exemptions are not wider than their predecessors in the Stamps Act 1958.
- Section 35 of the Act is only available in limited circumstances where property is “to be held” for the transferor.
- Section 33(3) of the Act is not capable of application to transfers between separate trusts.
- Notably, the Court held that transfers between trustees and beneficiaries are typically not for nil or nominal value as a matter of law. Instead, the “full value of the fee simple estate” is transferred.
