Goletsos v Commissioner of State Revenue (Review and Regulation)  VCAT 730
This matter concerns whether or not a transfer of land was exempt under s36A of the Duties Act as a transfer of land from a trustee to a beneficiary.
Issue – Hybrid Trusts
The sole issue in dispute was the correct characterisation of the trust in question, which comprised elements of both a unit trust and a discretionary trust.
On the Commissioner’s view, the trust was properly characterised as a trust to which a unit trust scheme relates and, accordingly, could not be characterised as a discretionary trust. As a result, no exemption from duty was available because although the recipient of the land in question was defined as a beneficiary under the trust, the recipient was not a unitholder of the trust.
On the Taxpayer’s view, the trust was properly characterised as a discretionary trust because certain discretionary powers were reserved to the trustee, even though the trust was ‘unitised’. On this view, an exemption from duty was said to be available because the recipient of the land was defined as a beneficiary under the trust.
On 9 May 2018, following a detailed examination of the terms of the trust and its operation, the Tribunal found in favour of the Commissioner. The Tribunal held that the trust must be regarded as a trust to which a unit trust scheme relates. As the relevant legislative definition of a discretionary trust expressly excludes ‘a trust to which a unit trust scheme relates’, the Tribunal confirmed the Commissioner’s assessment to duty.