This decision resulted in an additional $151,235 of duty plus interest and penalties payable to the Victorian State Revenue Office, given the unity of purpose of the 18 unrelated investors undertaking a specific development that constituted an “associated transaction” for the purposes of the Duties Act 2000 (Vic) (DA).

Butler explains that the Duties Act 2000 (Vic) imposes a duty on transfers of shares or units in entities that hold land in Victoria where the site/unimproved value of that land is $1 million or more.

“Landholder duty applies where a person (including a company) acquires at least 20 per cent of the units in a private unit trust, 50 per cent of the shares of a private company, or 90 per cent of shares in a public unit trust,” he said.

“Crucially, landholder duty applies where multiple acquisitions are aggregated together to achieve the relevant percentage. More specifically, multiple acquisitions are aggregated together when they are acquired by the same person/company, an associated person such as a relative, a partner in a partnership, or any other person in an associated transaction that gives effect to substantially one arrangement.”

He added that the Oliver Hume decision hinges on multiple investors acquiring shares in a company for the specific purpose of developing and selling the developed properties that constituted an “associated transaction”.

The facts of Oliver Hume involved the issue of 1.8 million shares in Diamond Creek Pty Ltd to 18 investors, including a number of SMSF investors, 14 of whom were existing Oliver Hume clients, two who were referred by a consultant and two who were unrelated to the others.

The court heard that no duty was paid in respect of these shares that raised $1.8 million.

“The Commissioner aggregated these acquisitions on the basis that they constituted ‘substantially one arrangement’. This resulted in duty, penalties and interest being imposed on the issue of shares in Diamond Creek Pty Ltd,” Butler said.

“This amount was in addition to the duty that Diamond Creek Pty Ltd paid on the original acquisition of the land.”

In the appeal, Oliver Hume challenged the determination, contending that each share issue was a discrete transaction and not sufficiently connected to be aggregated. However, VCAT and subsequently the Court of Appeal, upheld the Commissioner's position.

Butler continued that the court found that the acquisitions were interconnected in circumstances where no individual acquisition could go ahead at all unless the total of $1.8 million was raised.

Additionally, the effect of the acquisitions of the shares by the 18 investors substantially altered the shareholding in the landholder.

“The definition of an ‘associated transaction’ depends on the relationship between the acquisitions and whether they are ‘substantially one arrangement’, that is not on the relationship of the individuals concerned,” he said.

“Also, the share acquisitions, although implemented across multiple transactions, were part of substantially one arrangement. This decision reinforces the principle that allows the Commissioner to look beyond the formal structure of transactions and aggregate acquisitions where there is evidence of a coordinated or concerted acquisition strategy.”

He continued that several obligations on landholder acquisitions must be met, firstly, that the State Revenue Office must be notified of any duty liability, including any relevant acquisition in a landholder, within 30 days.

“The SRO offered an amnesty period and encouraged voluntary disclosures for arrangements covered by the ‘associated transaction’ head of duty with similar facts involved as in the Oliver Hume decision without any penalty for disclosures made prior to 30 June 2025,” he said.

Furthermore, Butler said it should be noted that the SRO has issued a ruling on the meaning of “associated transaction” (DA- 057v2).

“This lists factors that the SRO will take into account to determine whether persons are ‘acting in concert’ in relation to acquisitions which ‘form, evidence, give effect to or arise from substantially one arrangement, one transaction or one series of transactions’.”

“In determining whether acquisitions constitute an ‘associated transaction’, the Commissioner will consider the existence of any agreement, understanding or arrangement (written or oral) between the vendor(s) and/or the purchasers (acquirers) of the interests in the landholder.”

He added that the Commissioner will also consider whether there is any interdependency between the acquisitions, including whether completion of any of the acquisitions is conditional on the completion of any other acquisition.

Other issues that will be considered include whether the acquisitions of the interests were negotiated independently or together and/or arise from common circumstances, and whether the persons from whom the interest(s) were acquired are the same or associated persons.

Finally, the Commissioner will also take into account the relationship (if any) of persons who acquired interests in the landholder and the period over which the interests were acquired.

“Where clients believe they may have inadvertently triggered landholder duty, they should still consider a voluntary disclosure as it may still mitigate any penalty and interest exposure,” Butler said.

“While the penalty amnesty that was on offer up to 30 June 2025 following the Oliver Hume decision has now formally concluded, there can still be some concessions for making a voluntary disclosure from a penalty and interest perspective.”

Butler said advisers, including accountants, tax agents and lawyers who have clients that include SMSFs that have been or are involved in similar unit trust and company arrangements, as in the Oliver Hume decision, or that involve one or more of the factors referred to in the SRO ruling, should consider several things.

These include reviewing recent and future capital raisings for potential landholder duty exposure and associations between investors to determine whether there are any associated persons or entities.

“They should also assess all the acquisitions of units/shares as to whether they may form part of substantially one arrangement and may constitute an associated transaction and ensure appropriate documentation and legal advice is sought to determine whether there is any exposure and whether a voluntary disclosure is appropriate,” he added.

Moreover, Butler said the Oliver Hume decision came as a surprise to many advisers, as similar capital raisings have been popular in the property development industry for many years.

“This industry practice may have relied on the Commissioner not regarding acquisitions of interests by independent members of the public as an associated transaction if the acquisitions were made in response to a genuine public offer under a product disclosure statement or prospectus lodged with ASIC.”

“However, this view appears to have been relied on more broadly, especially by many with private arrangements like the one in Oliver Hume. The SRO Ruling has been updated following the Oliver Hume decision and it confirms that private arrangements do not obtain this concession.”