On 24 January 2024, in Imbree v Chief Commissioner of State Revenue [2024] NSWCATAD 22 (Imbree) the NSW Civil and Administrative Tribunal (Tribunal) held land transfer (stamp) duty was payable with respect to transfer of property to a superannuation fund as the Deed was held to be an ‘agreement to transfer’ (and dutiable) and not a ‘transfer of property’ and therefore did not qualify for exemptions.

Background

On 3 April 2002, the taxpayer, Mr Imbree was injured in a car accident. On 29 November 2004, a superannuation fund was established by way of trust deed (2004 Trust Deed) with the taxpayer and his son appointed trustees. The taxpayer was the only member of the superannuation fund and made contributions to it including the amount he received as damages from his personal injury claim. On 19 December 2009, the taxpayer and his son purchased a property (the Property) using funds of the superannuation fund.

In July 2022, the taxpayer sought a private ruling from the Chief Commissioner of State Revenue (NSW) (Chief Commissioner) confirming the transfer was for no consideration as it was a retirement benefit under section 57 of the NSW Duties Act. Prior to receiving a private ruling, on 24 August 2022, a Deed of Transfer was executed that was an agreement to transfer the NSW Property to Mr Imbree (2022 Deed of Transfer).

On 1 September 2022, the Chief Commissioner issued a private ruling finding that the 2022 Deed of Transfer did not fall within section 57 of the NSW Duties Act. On 11 November 2022, the Chief Commissioner issued assessments of stamp duty on the basis the 2022 Deed of Transfer was a dutiable transaction under sections 8 and 9 of the NSW Duties Act.

Issue and opposing arguments

The issue was whether the taxpayer was entitled to the following stamp duty concessions:

paragraph 55(1)(b) of the NSW Duties Act, which applies to the ‘transfer of dutiable property’; and
subsection 65(10) of the NSW Duties Act, which applies to instruments relating to superannuation.

The Chief Commissioner held that the exemption under paragraph 55(1)(b) of the NSW Duties Act was not available as it is only available to documents that give effect to a transfer, but not documents that constitute agreements to transfer, with the 2022 Deed of Transfer held to constitute the latter.

In addition, although the taxpayer established a superannuation fund, the exemption under section 65(10(b) for instruments relating to superannuation did not apply as the dutiable transaction was the 2022 Deed of Transfer and not the 2004 Trust Deed.

The taxpayer objected, arguing that the 2022 Deed of Transfer when read in conjunction a Deed of Variation that was also in place was not an agreement to transfer dutiable property but rather a document that gave effect to a transfer of dutiable property. On 22 May 2023, the Chief Commissioner disallowed that objection.

Decision

The tribunal considered the terms of the 2022 Deed of Transfer and held it was an “agreement to transfer dutiable property” and not a “transfer of dutiable property,” within the meaning of section 8 of the NSW Duties Act. As a result, the exemption in section 55 of the NSW Duties Act was held not to apply.

The Tribunal also rejected the taxpayer's contention the exemption under section 65(10(b) of the NSW Duties Act applied as the dutiable transaction was caused by the 2022 Deed of Transfer and not by the original 2004 Trust Deed.

Key observations

NSW imposes stamp duty where there are “changes in beneficial ownership” under section 9(1)(b)(ix) of the NSW Duties Act arguably anytime that there is a deed followed by a transfer of land.

Common arrangements e.g. a deed of family arrangement for a deceased estate followed by a transfer of land may not qualify for stamp duty exemptions based on a strict interpretation of the NSW Duties Act.

The outcome of this decision may have been different in Victoria as exemptions apply to documents that constitute agreements to transfer e.g. there is a duty exemption for a transfer from a superannuation fund to a beneficiary.

Action required

Taxpayers should be aware of the risk that a dutiable transaction other than a transfer of dutiable property does not fall under any exemption that references “a transfer of dutiable property” alone.

Please contact us with any questions or any other State Tax issues.

Phil Broderick
Principal
T +61 3 9611 0163 l M +61 419 512 801
E pbroderick@sladen.com.au

Nicholas Clifton
Principal Lawyer
T +61 3 9611 0154 | M +61 401 150 955
E nclifton@sladen.com.au

Meera Pillai
Associate
T +61 3 9611 0179
E mpillai@sladen.com.au