Nicholas Clifton, principal lawyer with Sladen Legal, said in the case of Imbree v Chief Commissioner of State Revenue [2024] NSWCATAP 158, the NSW Civil and Administrative Tribunal Appeal panel upheld a decision that transfer duty was payable on a deed of transfer of a property from an SMSF to the sole member.
“This case narrowly reads down exemptions to NSW stamp duty. Where an exemption references only a ‘transfer’ or another specified dutiable transaction, other forms of dutiable transactions should potentially not be subject to the exemption,” he said.
“This has particular relevance now that the dutiable transaction provisions have been extended to changes in beneficial ownership, without necessarily extending the scope of pre-existing exemptions.”
The facts of the case outlined that in 2004, a superannuation fund was established with Imbree and his son as trustees. Imbree was the only member of the superannuation fund and rolled over existing superannuation funds as well as making other contributions.
It continued that in 2009, Imbree and his son executed a contract of sale to purchase a property in NSW, in which they were the purchasers as trustees of the fund.
In July 2022, Imbree applied to the Chief Commissioner for a private ruling that section 57 (exemption for property passing to beneficiaries) of the Duties Act 1997 (NSW) applied to a request from him as member of the fund for the trustees to transfer to him a 95 per cent interest in the property held by the fund for no consideration.
Prior to receiving a private ruling, a deed of transfer was executed. Under the deed, the member requested that the trustees of the fund transfer the 95 per cent interest in the property to the member.
The deed also noted that the trustees had agreed to make the transfer. A purchase price of $3.3 million was set, but the member could replace his entitlements in the fund and, therefore, pay no consideration.
The Chief Commissioner assessed the deed of transfer to duty as an agreement to transfer dutiable property.
“The main issue before the tribunal was whether the exemption under section 55 (property vested in an apparent purchaser) of the Duties Act 1997 (NSW) applied,” Clifton said.
“This exemption applies to either a declaration of trust made by an apparent purchaser in favour of the real purchaser or to a transfer of dutiable property from an apparent purchaser to the real purchaser who provided the money for the purchase of the dutiable property.”
He continued that the matter could have been disposed of on the basis that as the funds for the purchase of the property came from the fund, the trustees were, therefore, both the apparent and the real purchasers of the 95 per cent interest.
“However, the tribunal also determined that as the deed was neither a transfer of dutiable property [nor] a declaration of trust, the exemption could not apply,” he said.
“This is despite subsection 9(1) of that act, which provides that for the purposes of charging stamp duty, transactions other than transfers of land are to be charged as if it was a transfer of dutiable property.”
Clifton said the decision shows that several exemptions or concessions from stamp duty are no longer fit for purpose.
“For example, deeds or agreements to transfer property from a deceased estate may not fall within the ‘deceased estate’ exemption in NSW, which references ‘transfers’ only,” he said.
“The outcome of this position may not be as burdensome in Victoria, where agreements to transfer dutiable property are not taxed under the Victorian provisions. In addition, in Victoria, there is a specific duty exemption for transfers from a superannuation fund to a member provided all of the relevant conditions are met.”
