Case Notes ~ Stamp Duty + Trust

LEEMHUIS INVESTMENTS MITCHELL PTY LTD v COMMISSIONER FOR ACT REVENUE (Administrative Review) [2023] ACAT 12

This case considered what constitutes a ‘declaration of trust’ for the purposes of being captured within section 7 of the Duties Act 1999 as a dutiable transaction. the Tribunal disagreed that a declaration of trust for the purposes of the Act is required to be in writing nor does it require some “express” declaration made. In the findings, the Tribunal referred to the case of Chief Commissioner of State Revenue v Benidorm Pty Ltd [2020] NSWCA 285 and its guidance that a declaration of trust occurs when there has been an ‘alteration in the legal or equitable rights concerning property’.

In application to the circumstances of the case, the Tribunal identified that the Partnership Agreement and the Management Agreement between two fixed trusts appointing a corporation as agent to hold legal title in the partnership property for the partners created an equitable interest. And the dissolution of the partnership by one trust transferring their 50% interest in the partnership property to the other trust altered the receiving trusts interest in the partnership interests from 50% to 100%. The receiving trust was deemed liable for ad valorem duty on 50% of the unimproved value of the partnership property.