Mould v CSR [2015] VSCA 285
The Commissioner had assessed to land tax various lands held by the taxpayer (a trustee of an estate), which included a large rural land and a portfolio of 26 residential properties that were being rented. The taxpayer contended that the rural land should be exempt as primary production land pursuant to s67 of the Land Tax Act 2005 (the Act).
The matter was first heard by Ginnane J of the Supreme Court, who found in favour of the Commissioner. On appeal to the Court of Appeal the sole issue for determination was whether the primary production exemption in s67 applied to the rural land, which turned on whether the renting of the portfolio of 26 residential properties constituted a business for the purposes of s67(2)(c)(i) of the Act. If it did, the primary production exemption in s67 was not be available as under s67(2)(c)(i) (as it stood at the relevant time) the primary production had to be the sole business of the trust.
On 27 October 2015 the Court of Appeal decided in favour of the Commissioner, upholding the assessments.
Their Honours went on to confirm that “business” in s67 of the Act bears its ordinary, general meaning, and that determining the existence of a business in that sense required consideration of the indicia most recently revisited by the High Court in Spriggs v Federal Commissioner of Taxation (2009) 239 CLR 1 (Spriggs) (at [84] and [199]).
Having examined the taxpayer’s activity in the present matter against the indicia in Spriggs, Warren CJ and Digby AJA concluded that the taxpayer was engaged in a business of leasing its extensive residential portfolio. As a result, the primary production land exemption did not apply.
