Cases Update Nicholas Clifton Jacqueline Wood Deloitte

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1 Cases Update 2016 Nicholas Clifton Jacqueline Wood Deloitte

2 Cases 1 ACN Pty Ltd Vic Land Tax 2 Seovic Engineering Pty Ltd NSW Payroll Tax 3 EHL Burgess Properties Pty Ltd Vic Land Tax 4 Kameel Pty Ltd Vic Land Tax 5 Konann Pty Ltd Vic Duty 6 Law Institute of Victoria Vic Payroll Tax 7 Metricon Qld Pty Limited NSW Land Tax 8 Re Keadly Pty Ltd & Ors SA Stamp Duty

ACN 005 057 349 ACN 005 057 349 Pty Ltd v

3 ACN ACN Pty Ltd v Commissioner of State Revenue [2015] VSCA 332 Source: Herald Sun

4 ACN Two neighbouring lots of land at Toorak Land tax assessments paid as issued from However historically, valuation of one lot included the value of the land in the other lot doubling the land tax payable.

5 ACN Subsection 90AA(2) of the LTA 1958 Vic refund must be sought within 3 years Held: overpaid land tax can be recovered outside the limitation period under a proceeding for mandamus. The Commissioner s conduct amounted to conscious maladministration for which mandamus was available. Special leave application to High Court has been made

6 Seovic Engineering Seovic Engineering Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCA 242 Source: Kerbco.com.au The NSW Court of Appeal held that discretionary degrouping for payroll tax was not available.

7 Seovic Engineering Engineering Civil Employees Exell

8 Seovic Engineering Engineering Civil Employees PRT Group A s71(2) Exell

9 Seovic Engineering Engineering Civil Employees PRT Group B Exell s71(2)

10 Seovic Engineering Engineering Civil Employees PRT Group s74(1) Exell

11 Seovic Engineering Section 79 of Payroll Tax Act 2007 (NSW): (1) The Chief Commissioner may, by order in writing, determine that a person who would, but for the determination, be a member of a group is not a member of the group. (2) The Chief Commissioner may only make such a determination if satisfied, having regard to the nature and degree of ownership and control of the businesses, the nature of the businesses and any other matters the Chief Commissioner considers relevant, that a business carried on by the person, is carried on independently of, and is not connected with the carrying on of, a business carried on by any other member of that group.

12 Seovic Engineering Discretionary degrouping for payroll tax was not available. s79(1) is not a broad discretion limited by s79(2). Factors such as whether the specific structure is artificial or contrived, results from splitting of one business or whether the parties deal on arm s length terms are not necessarily relevant. Degree of common ownership or control is relevant, but not determinative. Businesses were not carried on independently.

13 EHL Burgess Commissioner of State Revenue v EHL Burgess Properties Pty Ltd [2015] VSCA 269 Source: The Age

14 EHL Burgess Victorian primary production land tax exemption is stricter if land is inside Greater Melbourne. Definition of Greater Melbourne relied on boundaries of shires and councils abolished by Was Greater Melbourne limited to the Melbourne CBD?

15 EHL Burgess Held: general principles of statutory interpretation required Court to a take an interpretation that avoided attributing to Parliament either incompetence or institutional amnesia. Court took approach of reading into legislation historical boundaries of municipal districts at date immediately prior to abolition of relevant local government area. Accordingly, land within the old Shire of Whittlesea was within Greater Melbourne and therefore not exempt from land tax under the stricter test.

16 Kameel Kameel Pty Ltd v Commissioner of State Revenue [2016] VSCA 83 Source: Twitter

17 Kameel Was the purchaser under an uncompleted contract of sale subject to land tax as the owner of the land. Held: possession by a purchaser was sufficient, where it is consistent with the contractual arrangements between the parties. There does not need to be a specific legal right for possession in the documents.

18 Konann Commissioner of State Revenue v Konann Pty Ltd [2015] VSCA 278

19 Konann Property transferred from individuals to Konann. Purchase price originally paid by Annacott. Held transfer was subject to existing resulting trust therefore change of trustee exemption applied.

20 Konann Trustees PWFT

21 Konann Annacott Pty Ltd Trustees $$$ Land Tulliallan PWFT Purchased land

22 Konann Trustees Land Tulliallan PWFT 2006 Transfer and appointment of new trustee Konann Pty Ltd

23 Konann Annacott Pty Ltd??? PWFT??? Was Konann trustee for Annacott? Land Tulliallan Owner Konann Pty Ltd

24 Konann Annacott Pty Ltd Always held under resulting trust for Annacott Land Tulliallan Owner Konann Pty Ltd

25 Konann The primary production exemption for land tax relied on Annacott (as primary producer) being owner of the land. Annacott was a primary producer, but Konann was not. Held: Annacott was the owner of the land as always held beneficial ownership under the resulting trust.

26 LIV Law Institute of Victoria v Commissioner of State Revenue [2015] VSC 604 Source: LIV

27 LIV The Law Institute of Victoria (LIV) sought an exemption under s48 of the Payroll Tax Act 2007 (Vic) (PTA Vic) as a non-profit organisation having as its sole or dominant purpose a charitable purpose. Argued dominant purpose was to promote the development of the law and legal profession for the benefit of the public.

28 LIV Activities of the LIV Advocacy Referral services Education and professional development Publications Delegated function (ie regulation and discipline) Information & practice resources (bookstore, costings etc) Marketing

29 LIV Held: LIV s charitable purpose was not its sole or dominant purpose. The maintenance and sustenance of the law was a charitable purpose. The dominant purpose must be the main objective of the organisation the ruling or prevailing purpose. A charitable objective will not be the dominant purpose if there are other independent objects or activities. The membership and regulatory activities were not incidental to the main charitable purpose and were independent objectives.

30 Metricon Metricon Qld Pty Limited v Chief Commissioner of State Revenue (No. 2) [2016] NSWSC 332 Source: AFR

31 Metricon Land tax primary production exemption successfully obtained. Land was used for primary production but also held for future residential development. Question: which was the dominant use?

32 Metricon Court held that it was the current use or uses of the land that were relevant - not the intended future use. Future use may be relevant, to the extent that it results in physical activities on the land (ie testing/drilling etc). % of expenditure relating to future development use is not relevant, unless it relates to physical activities.

33 Keadly Re Keadly Pty Ltd & Ors [2015] SASC 124 The South Australian Supreme Court allowed rectification of trust deeds to eliminate beneficiaries that would fall outside of the interfamilial transfer of farming property under section 71CC of the Stamp Duties Act 1923.

34 Keadly Commissioner deferred decision on objection to allow application for rectification. Problems in trust deeds resulted from genuine confusion in drafting processes. Did not matter that rectification was sought to allow stamp duty benefit.

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36 Nicholas Clifton and Jacqueline Wood, Deloitte 2016 Disclaimer: The material and opinions in this paper are those of the author and not those of The Tax Institute. The Tax Institute did not review the contents of this presentation and does not have any view as to its accuracy. The material and opinions in the paper should not be used or treated as professional advice and readers should rely on their own enquiries in making any decisions concerning their own interests.

August 2015 stamp duty developments

Ashurst Australia 16 September 2015 Stamp Duty Bulletin August 2015 stamp duty developments WHAT YOU NEED TO KNOW This Bulletin outlines Australian stamp duty developments in August 2015, which may impact