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In this matter, the taxpayer was the purchaser under a contract of sale of real estate. The taxpayer subsequently nominated 2 related entities as substitute purchasers, which took the transfer of the property at settlement. Between the contract and nomination dates, a planning permit application was lodged in respect of the property. Consequently, the Commissioner assessed the taxpayer to duty under the sub-sale provisions of the Duties Act 2000 – Transfers involving land development, together with penalty tax and interest under the Taxation Administration Act 1997 (TAA).

The taxpayer contended that he was entitled to a duty exemption under section 34 and/or section 36 (fixed trust) of the Duties Act. Alternatively, he submitted that the Tribunal could and should exercise the discretion in section 8 of the TAA not to issue an assessment in the circumstances of the matter.


On 11 January 2022 the Tribunal found in favour of the Commissioner and confirmed the assessment for the following reasons.

Firstly, in the context of a sub-sale transaction, the exemptions contained in sections 34 and section 36 are incapable of applying on a stand-alone basis. To the extent that those exemptions could be applicable through the prism of a hypothetical transaction created by section 32N(1) of the Duties Act, they do not apply here since the requisite trust relationship between the taxpayer and the vendor was not established.

Secondly, the Tribunal confirmed that in a review proceeding it did not have the ability to exercise any discretion under section 8 of the TAA not to issue an assessment.

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