Zarpat Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2019] VCAT 306

Background

The issue was whether the taxpayer’s acquisition of a 25% interest in a unit trust constituted a ‘relevant acquisition’ within the meaning of s78 of the Duties Act 2000. This turned on whether the transaction had breached the terms of a trust deed and whether a resulting trust arose over the units so that no beneficial interest could be conveyed to the taxpayer.

Decision

On 4 March 2019, the tribunal decided the matter in favour of the Commissioner. Among other things, it held that irrespective of whether there was a breach of trust, a resulting trust could not have arisen in the circumstances. Among other things, there was no transfer to a trustee on a trust that either failed or was incomplete. The transfer was also purportedly made by way of a capital distribution. This was similar to a gift, which falls outside the scope of a presumed resulting trust.