A Matter of Trusts

Taxation in Australia Journal

The Victorian Court of Appeal’s decision in MD Commercial Pty Ltd v Commissioner of State Revenue [2019] VSCA 295 was a culmination of the battle between the Victorian Commissioner of State Revenue and the taxpayers’ statutory interpretation of a duty exemption contained in s 35 of the Duties Act 2000 (Vic) (Act) and whether the trustee had to be in a “bare trustee” relationship with no active powers being held by the trustee. This time, the taxpayers have won, with the Victorian Court of Appeal providing a much-needed practical and literal approach to interpreting the legislation. Consequently, the trustees qualified for the duty exemption, as the beneficial ownership remained unchanged despite having powers to develop and sell the property.

This article examines a brief history of the Victorian duty exemption under section 35 the Act and examines the application of this exemption for transfers of land to trustees where there is no change in beneficial ownership.

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