Background
A father and his son (the taxpayers) purchased a property in Pascoe Vale on which they intended to develop 2 units. They established a discretionary trust and the corporate trustee, of which they were the directors and shareholders. The Trustee was nominated to take the transfer and became the registered sole proprietor of the property. Following the development, the company was deregistered, the property was partitioned and the father and son each became the registered proprietor of one of the 2 lots.
Issues
Whether the transfer was exempt from duty under s 36A of the Duties Act 2000 (the Act) on the basis that the property was transferred to the taxpayers as beneficiaries of the trust.
Decision
On 13 October 2023, the Tribunal delivered judgment in favour of the Commissioner, confirming the assessment to duty. The Tribunal found that there must have been an “extinguishment of the loan balance” owed by the trustee to the taxpayers, whether by way of payment, set off, forgiveness or otherwise. Whether this occurred contemporaneously with the transfer or not, it held that it was clear the taxpayers accepted that “once the property had been transferred to [them] … there was no longer any monies owed”.
