Camwall Pty Ltd atf Antap Trust v Chief Commissioner of State Revenue

Case •

[2025] NSWCATAD 136

•

13 June 2025

No judgment structure available for this case.

Civil and Administrative Tribunal


New South Wales

Medium Neutral Citation: Camwall Pty Ltd atf Antap Trust v Chief Commissioner of State Revenue [2025] NSWCATAD 136
Hearing dates: 10 December 2024
Date of orders: 13 June 2025
Decision date: 13 June 2025
Jurisdiction:Administrative and Equal Opportunity Division
Before: S Higgins, Senior Member
Decision:

Pursuant to section 63(3)(d) of the Administrative Decisions Review Act 1997, the assessment for duty made by the respondent on 15 January 2024 is set aside and, remit for reconsideration by the respondent the issue as to whether the amendment to the Antap Trust Deed disentitled the applicant to the exemption in section 274 of the Duties Act 1997 (NSW), in accordance with these reasons for decision and the proper construction and application of section 274(4A)(b)(ii) of that Act.

Catchwords:

TAXES AND DUTIES – transfer of farming property between family members – applicant transferee a company as trustee for a discretionary family trust – whether transfer exempt from duty under section 274 of the Duties Act 1997 (NSW) (Duties Act) - date on which the matters in section 274(2) to (4) must be satisfied.

TAXES AND DUTIES - whether the amendment of the family trust deed that substituted another family member as the person entitled, as taker in default of appointment to the interest in the capital of the trust fund, has the effect that the three-year requirement in section 274(4A)(b)(ii) of the Duties Act 1997 (NSW) cannot be met.

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)

Duties Act 1997 (NSW)

State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW)

Taxation Administration Act 1996 (NSW)

Cases Cited:

Chief Commissioner of State Revenue v Benidorm Pty Ltd [2020] NSWCA 285

Cornish Investments Pty Ltd v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25

Gardiner v Chief Commissioner of State Revenue [2004] NSWSC 107

Category:Principal judgment
Parties: Camwall Pty Ltd atf Antap Trust (Applicant)
Chief Commissioner of State Revenue (Respondent)
Representation:

Counsel:
B DeBuse (Applicant)

Solicitors:
Snelgrove Herman Lawyers (Applicant)
Crown Solicitor (Respondent)
File Number(s): 2024/00283477
Publication restriction: Nil

REASONS FOR DECISION

  1. On 26 October 2023, the applicant, Camwall Pty Ltd as Trustee for (atf) the Antap Trust, entered an agreement to purchase land used for primary production (the Property) from Patricia Anne Wallace (Mrs Wallace). The Property is land that is used as part of the Wallace family business of primary production.

  2. The sole director of the applicant is John Cameron Wallace (John Wallace). He is also the son of Mrs Wallace and the person who has at all relevant times been the person who carried on the Wallace family business.

  3. The Antap Trust is a discretionary family trust. John Wallace is named as the Principal in the Trust Deed, a beneficiary of the Trust and, prior to its amendment on 24 January 2024, clause 3.4(c) of the Trust Deed made provision for the children of John Wallace being entitled, as takers in default of appointment to the Antap Trust Fund.

  4. On 15 January 2024, the respondent, the Chief Commissioner of State Revenue, decided he was not satisfied that the applicant’s purchase of the Property was exempt from duty under section 274 of the Duties Act 1997 (NSW) (Duties Act) and assessed the applicant as being liable for ad valorem duty, under Chapter 2 of that Act.

  5. The applicant objected to the assessment and on 5 June 2024, the respondent determined to disallow the objection.

  6. On 2 August 2024, the applicant lodged this application as it continues to contend that the purchase of the Property was an intergenerational transfer of land used for primary production between family members that satisfied the matters in section 274(2)-(4) of the Duties Act. It is the contention of the applicant that, on its proper construction, the matters in section 274(2)-(4) should be assessed as at the date on which the instrument of Transfer was executed and not on the date on which liability for duty arose.

  7. It is the respondent’s contention that the word ‘transfer’ in section 274 has the same meaning and application given to this word in Chapter 2 of the Duties Act and, the matters in section 274(2)-(4) must be satisfied as at the date on which liability for duty arose under that Chapter (i.e. the date on which the agreement for sale (Contract) was executed).

  8. In this application, the respondent accepts that the exemption did apply as at the time liability for duty arose (26 October 2023) concerning the applicant’s purchase of the Property.

  9. However, the respondent contends that the applicant ceased being entitled to the exemption when, on 24 January 2024, a new clause 3.4(c)(1) was inserted into the Antap Trust Deed, making John Wallace, entitled, as taker in default of appointment and the children of John Wallace only becoming so entitled in the event John Wallace was no longer alive. It is the contention of the respondent that with the removal of John Wallace’s children from clause 3.4(c)(1) the three-year requirement in section 274(4A)(b)(ii) of the Duties Act could no longer be met. Hence, the applicant’s entitlement to the exemption must be revoked.

  10. Section 274 relevantly provides as follows:

274   Transfer of certain business property between family members

(1)  Duty under this Act is not chargeable in relation to a transfer of land used for primary production, together with other property that is an integral part of the business of primary production, if the Chief Commissioner is satisfied of all the matters specified in subsections (2)–(4).

(2)  Firstly, the Chief Commissioner must be satisfied that the transferor, or the person directing the transferor, is a member of the family of—

(a)  the transferee, or

(b)  the person directing the transferee.

(3)  Secondly, the Chief Commissioner must be satisfied that the land was, immediately before the transfer or the date of first execution of the instrument of transfer, land used for primary production in connection with a business carried on, whether alone or with others, by—

(a)  the transferee, or a member of the family of the transferee, or

(b)  the person directing the transferee, or a member of the family of the person directing the transferee.

(4)  Thirdly, the Chief Commissioner must be satisfied that the business will continue to be carried on, whether alone or with others, by—

(a)  the transferee, or

(b)  the person directing the transferee.

(4A) For the purposes of this section, the person directing a transferor or transferee is—

…

(b)  for a transferor or transferee acting in the capacity of trustee of a discretionary trust—a person or persons who are entitled, as takers in default of appointment, to not less than a 25% interest in the capital of the trust, being an entitlement—

(i)  for a transferor—that existed for at least 3 years before the date of the transfer or that existed from the date of establishment of the trust, or

(ii)  for a transferee—that exists for at least 3 years after the date of the transfer, or

…

(4B) …

(5) Except as provided by subsections (4A) and (4B), there are no other cases in which a person is considered to be a person directing a transferor or transferee.

(5AA)  A reference in this section to a business carried on by a person includes a reference to a business carried on by a company, or under a trust, that is controlled by the person.

(5A)   (Repealed)

(6)  In this section—

member, of a transferee’s family, means each of the following persons—

(a)  the transferee’s spouse,

(b)  a parent of the transferee or the transferee’s spouse,

(c)  a grandparent of the transferee or the transferee’s spouse,

(d)  a brother, sister, nephew, niece, uncle or aunt of the transferee or the transferee’s spouse,

(e)  a child or grandchild of the transferee or the transferee’s spouse,

(f)  the spouse of anyone mentioned in paragraph (b), (c), (d) or (e).

spouse includes a former spouse, a de facto partner and a former de facto partner.

transfer of land includes the following—

(a)  an agreement for the sale or transfer of the land,

(b)  a lease of the land,

(c)  a transfer or assignment of a lease or permit in relation to the land.

  1. Section 274 was amended in 2022, by clause 25 in Schedule 1 of the State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW) (2022 Amendment Act). Prior to its amendment, the exemption in section 274 only extended to family farm transfers where the transferor was a company or other entity controlled by the family. That is, the transferee had to be an individual family member.

  2. In recognition of structures commonly used by farming families and to make the exemption fairer, the 2022 amendments extended the exemption to family farm transfers where the new owner (transferee) is a company or other entity that is controlled by the family.

Jurisdiction of the Tribunal

  1. The applicant’s application for administrative review of the respondent’s 15 January 2024 assessment is made under section 96 of the Taxation Administration Act 1996 (NSW) (TA Act).

  2. The administrative review is conducted under the Administrative Decisions Review Act 1997 (NSW) (ADR Act).

  3. The role of the Tribunal is to decide the correct and preferable decision having regard to the material before it and the applicable law: ADR Act section 63(1).

  4. In this application, the applicant has the onus of proving its case: TA Act section 100(3), which means the applicant must prove all the matters necessary for the Tribunal to answer the statutory questions in its favour: Cornish Investments Pty Ltd v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [36].

  5. For the reasons I am about to explain:

  1. I agree with the submissions of the solicitor of the respondent that the date on which the respondent must be satisfied of the matters in section 274(2)-(4) for the exemption to apply is the date on which liability for duty arises under Chapter 2 of the Duties Act; and

  2. on its proper construction and application, section 274(4A)(b)(ii) of the Duties Act it is the ‘entitlement’ which must be continuing to exist for three years and, by reason of section 274(2), the person so entitled must be a family member of the transferor or the person directing the transferor.

  1. Based on my findings and the concessions made by the respondent I have decided:

  1. to set aside the 15 January 2024 assessment decision of the respondent as it is conceded by the respondent that this was not the correct and preferable decision at that time; and

  2. to remit for reconsideration, by the respondent the issue as to whether the amendment to the Antap Trust Deed disentitled the applicant to the exemption in section 274 of that Act in accordance with these reasons for decision and the proper construction and application of section 274(4A)(b)(ii) of the Duties Act 1997 (NSW).

Background

  1. The background facts in this application are not disputed. In summary they are as follows:

  1. Mrs Wallace, the owner of the subject land is 85 years of age;

  2. the subject land is part of the Wallace family rural property that is used for primary production between family members;

2015 Establishment of The Antap Trust

  1. the Antap Trust was established in September 2015. Its Trustee was Silknote Pty Ltd. The named beneficiaries in the Trust Deed were the four children of Mrs Wallace, which included John Wallace. John Wallace is named as Principal;

  2. the Trust Deed contained the following relevant provisions:

  1. clause 1.1 defines the term ‘Beneficiaries’ to include the persons named in the Schedule (the four children of Mrs Wallace) and other classes of family members, other trusts and other entities in which the beneficiaries have an interest;

  2. clause 3.1 provides that the Trustee may determine the income of the Trust in each accounting period;

  3. clause 3.2(c) provides that the Trustee may determine the amount or share of any receipt, profit, gain or other amount of the Trust Fund to which a Beneficiary is specifically entitled;

  4. clause 3.3 provides that the Trustee may, at any time prior to the expiration of any accounting period, determine to distribute the income of the Trust to one or more of the Beneficiaries living or in existence;

  5. clause 3.4(a) provides that, until the Vesting Day, the Trustee will have the power from time to time to Distribute such part or parts of the capital of the Trust Fund as it deems fit;

  6. clause 3.4(b) provides that, on and from the Vesting Day the Trustee will stand possessed of the Trust Fund in trust for the Beneficiaries in such shares and proportions as the Trustee may determine prior to the Vesting Day; and

  7. clause 3.4(c) provided as follows:

In default of any determination by the Trustee under Clause 3.4(b):

1) The Trust Fund will be held by the Trustee upon trust for such of the surviving Children of the Beneficiaries named in the Schedule, in equal shares as tenants in common provided that if any Child of the Beneficiaries named in the Schedule has died prior to the Vesting Day leaving a Child or a remoter issue of such disease Child living on the Vesting Day, then such Child or a remoter issue or both will take the share which such deceased Child would have taken had he or she been living on the Vesting Day.

2) If on the Vesting Day there is no Child or a remoter issue of the Beneficiaries named in the Schedule surviving, then upon trust for any other Beneficiaries living, and if more than one, then in equal shares; And

3) If on the Vesting Date there are no Beneficiaries surviving, then upon trust for such in (Charitable Body or Bodies) and in such proportions as the Trustee in its discretion determines on or prior to the Vesting Day.

2019 - Appointment of applicant as Trustee of the Antap Trust

  1. on 13 June 2019, the Trustee of the Antap Trust was amended by replacing Silknote Pty Ltd with the applicant;

2019 – Disclaimer of interest by the siblings of John Wallace in the Antap Trust

  1. on 24 June 2019, the brother and two sisters of John Wallace disclaimed their interest as named beneficiaries of the Antap Trust. Hence, at all relevant times, John Wallace was the only child of Mrs Wallace who was entitled as a beneficiary named in Schedule 1 of the Trust Deed;

26 October 2023 – Execution of contract for the Sale of the Property

  1. on 26 October 2023, Mrs Wallace as vendor and the applicant as purchaser executed a contract for the sale of the Property;

15 November 2023 – Execution of Deed Poll to amend clause 3(c) of the Antap Trust Deed

  1. on 15 November 2023, a Deed Poll was executed which contained amendments to the Antap Trust Deed. The amendments included:

  1. the insertion of a new paragraph (1) in clause 3.4(c) which provided that ‘The Trust Fund shall be held by the Trustee for John Cameron Wallace’;

  2. existing paragraphs (1) to ( 3) of clause 3.4(c) were renumbered (2) to (4) and the words ‘If on the Vesting Day John Cameron Wallace shall not be alive’ were inserted at the commencement of renumbered paragraph (2); and

  3. the abovementioned amendments were not to take effect until the respondent had approved the applicant’s application (Application Form ODA-071A), for exemption, under section 274 of the Duties Act, in respect of transfer of the Property from Mrs Wallace to the applicant;

16 November 2023 – Applicant lodged an application for exemption under section 274

  1. on 16 November 2023, the solicitor for the applicant lodged an application (Application Form ODA-071A) with the respondent seeking an exemption from duty, under section 274 of the Duties Act, in respect of the proposed purchase of the Property. In that application, John Wallace was named as the person directing the transferee;

15 January 2024 – respondent assessed the contract for sale for ad valorem duty as the requirements of section 274 not satisfied

  1. on 15 January 2024, following requests for further information from the applicant (which was provided), the respondent wrote to the applicant and advised that all the necessary requirements under section 274(4A)(b)(ii) had not been satisfied and the Contract had been assessed for ad valorem duty. As noted above, the respondent issued a notice of assessment the same day;

15 January 2024 – the 15 November 2023 Deed Poll amendments to the Antap Trust Deed were adopted and effective from that day

  1. on 15 January 2024, John Wallace, as sole director of the applicant, resolved to ‘adopt from today the amendments to the Antap Trust as set out in the 15 November 2023 Deed Poll’;

24 January 2024 – applicant paid the amount of duty assessed and a transfer of the Property was executed and lodged

  1. On 24 January 2024, the applicant paid duty as assessed by the respondent and proceeded with the transfer of the Property;

10 and 28 February 2024 – request for further explanation

  1. on 10 February 2024, the applicant wrote to the respondent seeking a further explanation as to why section 274(4A)(b)(ii) of the Duties Act had not been satisfied;

  2. the respondent responded on 28 February 2024 advising that:

“Camwall Pty Ltd ATF Antap Trust entered into the Contract of sale executed on 26/10/2023 – this being the liability date. The Deed Poll of Amendment was executed on 15/11/2023 after the liability date. My decision stands as section 274(4A)(b)(ii) wasn’t satisfied at the liability date.”

14 March 2024 – applicant lodges objection to the respondent’s assessment of ad valorum duty

  1. on 14 March 2024, the applicant lodged its objection to the respondent’s 15 January2024 assessment. The grounds on which that objection was made are like the grounds relied on by the applicant in this application;

5 June 2024 – respondent determined to disallow the applicant’s objection

  1. on 5 June 2024, the respondent determined to disallow the applicant’s objection on the grounds that liability for duty arose as at the date of the agreement for the sale of the Property (26 October 2023) and not as at the date of the execution of the instrument of Transfer of the Property (24 January 2024). In his determination the respondent found that the applicant was not entitled to claim the section 274 exemption because, as at the date of the agreement for sale (Contract), the ‘person directing’ the applicant was not a person(s) that met the requirements of section 274(4A)(b)(ii) of the Duties Act.

The applicant’s case

  1. In his written submissions of 30 September 2024, counsel for the applicant submitted that the following extracts in the Explanatory Note and Second Reading Speech of the State Revenue and Fines Legislation Amendment (Miscellaneous) Bill 2022 (NSW) (2022 Amendment Bill), supported the applicant’s case that the concession (exemption) in section 274 applied as at the date on which the instrument of Transfer was executed:

  1. (per the Explanatory Note):

“… [if the transferee] is a proprietary limited company or a trustee of a discretionary trust or of a private unit trust scheme, the person directing the transferee must, for the exemption to apply, maintain the person’s minimum 25% interest in the transferee for 3 years after the transfer.”

  1. (per the Second Reading Speech in the NSW Legislative Assembly on 23 March 2022) (Emphasis added):

“… [allow] the exemption for family farm transfers to apply where the land is transferred to a company or other entity, so long as that entity is directed by a family member. This will make the exemption fairer and bring it into line with the structures commonly used by farming families.

To maintain the integrity of the exemption, the family member will be required to maintain control of the transferee entity for at least three years after the transfer, consistent with the current requirement that the transferor entity must have been controlled by a family member for a minimum of three years prior to the transaction.”

  1. Counsel for the applicant went on to submit that, in using the unqualified words ‘after the transfer’ in the abovementioned extracts, it was Parliament’s intention that duty would be assessed at the time of transfer and if, at the time of transfer, the requirements of section 274(4A)(b)(ii) were met, the transfer would be exempt.

  1. Counsel for the applicant also submitted that, contextually it made sense that duty is assessed at the time of transfer, as the section 274 exemption is granted on the assumption that the person(s) directing the transferee will hold and maintain the entitlement as taker(s) in default of appointment for at least 3 years ‘after the date of the transfer’. This approach, the applicant contends to be consistent with the respondent’s ruling DUT 050v2.

  2. It was argued that the duties exemption applied in this case and continues to apply because:

  1. as at the date on which the Property was transferred to the applicant, the person directing the applicant was John Walker and not his children. This change having occurred prior to the date of transfer, whereby, through the amendment of the Antap Trust Deed in January 2024, John Walker became entitled as the sole taker in default of appointment to not less than 25% interest in the Antap Trust; and

  2. since that time John Walker has continued to maintain his entitlement as the taker in default of appointment to not less than 25% interest in the Antap Trust. And should he die before the expiry of three years his child children become entitled as takers in default of appointment.

  1. Based on the exemption applying as at the date of the instrument of Transfer, counsel for the applicant contended that there should be a refund of the duty that had been paid.

The respondent’s case

  1. In her written submissions of 31 October 2024, the solicitor for the respondent submitted that:

  1. ruling number DUT 050v2, at [26] and [27], is consistent with the word ‘transfer’ in section 274 having the same meaning and application that this word had in Chapter 2 of the Duties Act regarding the imposition of duty generally, namely the date on which the agreement for sale (Contract) is executed; and

  2. even if regard could be had to the Explanatory Note and the Second Reading Speeches for the 2022 Amendment Bill, they do not provide any support to the applicant’s case that the relevant date for assessing whether the exemption in section 274 applies is the date on which the Property is transferred to the applicant and not the date of the agreement or Contract.

  1. It was noted that section 247(1) of the Duties Act expressly provides that ‘duty is not chargeable’ in relation to a ‘transfer of land’ used for primary production, if each of the matters prescribed in section 274(2)-(4) are satisfied. A ‘transfer of land’ is defined in section 274(6) to include an agreement for the sale or transfer of land. That is, it was submitted that on its proper construction, the exemption applies where the matters in section 274(2)-(4) are satisfied as at the date on which duty is chargeable and not as at the date the land has in fact been transferred.

  2. In this regard, the solicitor for the respondent provided an outline, along the following lines, as to how, under Chapter 2 of the Duties Act, duty is imposed and charged generally on a ‘transfer’ of dutiable property (which includes land in NSW):

  1. both a transfer of dutiable property and an agreement for the sale or transfer of dutiable property are dutiable transactions: Duties Act section 8(1)(a) and (b), That is, duty is assessed on dutiable transactions and not on instruments: Gardiner v Chief Commissioner of State Revenue [2004] NSWSC 107 (Gardiner) at [17]; Chief Commissioner of State Revenue v Benidorm Pty Ltd [2020] NSWCA 285 (Benidorm) at [80] and [120] ;

  2. where a dutiable transaction is an agreement for the sale or transfer of dutiable property, duty is charged as if that dutiable transaction were a transfer of dutiable property: Duties Act section 9(1). How, when and on whom duty is charged in respect of a dutiable transaction that is a transfer of dutiable property is prescribed in section 9(2) of the Duties Act. In respect of a dutiable transaction that is an agreement for the sale or transfer of dutiable property, the transfer is deemed, for the purpose of charging duty, to have occurred when the agreement for the sale is entered into;

  3. where a transfer of dutiable property is ‘effected’ by an instrument (for example an agreement for the sale), liability for duty arises when the instrument is first executed (in this case 26 October 2023): Duties Act section 12(2);

  4. duty that is charged is payable by the transferee, unless provided otherwise: Duties Act section 13; and

  5. where a ‘transfer’ of dutiable property is made in conformity with an agreement for the sale or transfer of the dutiable property, duty is chargeable at $20 if the duty chargeable in respect of the agreement has been paid: Duties Act section 18(2).

  1. Based on the above, the solicitor for the respondent submitted that the date on which the matters in section 274(2)-(4) must be satisfied for the exemption to apply is the date on which the agreement for sale (Contract) of the subject land is executed. And, even where the matters in section 274(2)-(4) are satisfied, the exemption will be revoked if the three-year requirement in section 274(4A)(b)(ii) is not met. In this regard the respondent submitted (Emphasis added):

“58. The effect of the three year requirement in s.274(4A)(b)(ii) is that an exemption under s.274 may be granted if s.274(2) and s.274(4A)(b)(ii) are satisfied at the time of the relevant transfer, in the present case, the Contract date, but reassessed to revoke the exemption if the takers in default do not retain their entitlement for three years after that.”

  1. As I have already noted, the respondent now concedes that each of the matters in section 274(2) to (4) were satisfied as at the date of Contract, being 26 October 2023. However, the respondent now contends that on the amendment of the Antap Trust Deed, the exemption ceased to apply, because John Wallace’s children did not retain their entitlement as takers in default for a period of three years after the Contract date (i.e. ‘after the date of transfer’). Accordingly, even if the respondent had accepted the applicant’s application for exemption on 15 January 2024, that acceptance would be revoked following the amendment of the Antap Trust Deed.

Consideration

  1. There is no dispute that, in this case:

  1. the Property the subject of this application is land used for primary production, together with other land that is an integral part of the Wallace family business of primary production;

  2. the parties to the Contract and the instrument of Transfer are Mrs Wallace as transferor and the applicant atf the Antap Trust as transferee;

  3. at all relevant times, the sole director of the applicant has been John Wallace, the son of Mrs Wallace and the sole beneficiary named in Schedule 1 of the Antap Trust Deed;

  4. immediately before the date of the Contract, the Property was land used for primary production in connection with the Wallace family primary (26 October 203) production business;

  5. the Wallace family primary production business has been and continues to be carried on by John Wallace;

  6. as at the date of Contract (26 October 2023) the ‘persons directing the applicant’ were the children of John Wallace as they were the persons named in the Antap Trust Deed, as takers in default of appointment, to not less than a 25% interest in the capital of the Antap Trust;

  7. as at the date of the instrument of Transfer (24 January 2024) the ‘person directing the applicant’ was John Wallace (and in the event of his death, the children of John Wallace), as he (and in the event of his death, the children of John Wallace) was (were) the person(s) named in the Antap Trust Deed as the individuals entitled, as taker in default of appointment, to not less than a 25% interest in the capital of the Antap Trust: Duties Act; and

  8. at all relevant times Mrs Wallace, was a member of the family of the children of John Wallace and John Wallace.

  1. In Gardiner, at [17]-[19], Gzell J made the following observation about how and when duty is assessed and charged under the Duties Act:

“17 Duty was charged on a transfer of dutiable property under the Duties Act 1997, s 8(1)(a). The term “transfer” was not defined other than, relevantly, to include an assignment and an exchange. “Dutiable property” was defined to include land in New South Wales under s 11(1)(a) and an interest in land under s 11(1)(l). Unlike earlier stamp duty legislation, it was the transaction and not the instrument that gave rise to the charge to duty. Section 10 provided that it was immaterial whether or not a dutiable transaction was effected by a written instrument.

18 The charge to duty arose when the transfer of dutiable property occurred under the Duties Act 1997, s 12(1). However, the legislation contained an advance collection mechanism. Section 12(2) provided that if a transfer of dutiable property was effected by a written instrument, liability for duty arose when the instrument was first executed. The duty was payable within three months of the liability for duty arising under s 16(1).

19 The advance collection mechanism was not limited to instruments of transfer. The Duties Act 1997, s 8(1)(b) charged duty on other transactions such as an agreement for sale or transfer of dutiable property. A transfer and each such other transaction was defined as a “dutiable transaction” under s 8(2). Section 9(1) provided that duty with respect to such other dutiable transactions was to be charged as if each was a transfer of dutiable property. In consequence, if a written instrument was brought into existence, the liability to duty arose on first execution under s 12(2).”

  1. I do not understand the applicant to dispute that, in the absence of the exemption applying, it would be liable for duty under the Duties Act regarding its purchase of the Property. Furthermore, the applicant does not dispute that, in the absence of the exemption applying, this liability would arise as at the date of Contract, which was 26 October 2023.

  2. As I have already noted, there are two matters in dispute in this application. These are:

  1. the date on which the respondent is to be satisfied of the matters in section 274(2) to (4) for the exemption to apply; and

  2. did the amendment to the Antap Trust Deed prior to the expiry of three (3) years after the date of ‘transfer’ disentitled/revoked the applicant’s entitlement to the exemption in section 274?

The date on which the respondent is to be satisfied of the matters in section 274(2) to (4)

  1. I agree with the solicitor for the respondent that on its proper construction, the date on which the respondent is to be satisfied of the matters in section 274(2)-(4) is the date on which liability for duty arises, under the Duties Act. That liability arising under the provisions in Chapter 2 of the Duties Act.

  2. This is made clear in the introductory words of section 274(1) which state: ‘Duty under this Act is not chargeable in relation to a transfer of land used …’ That is, the exemption applies to exempt a ‘transfer of the land’ from being charged duty under the Duties Act. In other words, duty will not be charged on a ‘transfer of land’ where the matters in section 274(2)-(4) apply.

  3. As noted above, section 8(1)(a) of the Duties Act provides that Chapter 2 of that Act charges duty on a ‘transfer’ of dutiable property – section 11 defines ‘dutiable property’ to include land in NSW.

  4. Section 8(1)(b) provides that Chapter 2 of that Act charges duty on the ‘transactions’ prescribed in that paragraph, which includes a transaction that is ‘an agreement for sale or transfer’ of dutiable property (i.e. land in NSW): Duties Act section 8(1)(b)(i)). Section 9(2)(c) in Chapter 2, sets out when the ‘transfer’ of the transactions prescribed in section 8(1)(b) occur. Where the transaction is ‘an agreement for sale or transfer’, section 9(2)(c) provides that the ‘transfer’ occurs when the agreement is entered.

  5. Section 12(1), in Chapter 2, provides that liability for duty arises when a ‘transfer’ of dutiable property occurs. However, if the ‘transfer’ is effected by an instrument, liability arises when the instrument is first executed: Duties Act section 12(2).

  6. Hence, I agree with the submissions of the solicitor for the respondent that the word ‘transfer’ in section 274 and the meaning of ‘transfer of land’ in section 274(6) have the same meaning and application to that given to these words in Chapter 2 of the Duties Act.

  7. I note that this construction and application is consistent with the terms of section 274 prior to the 2022 Amendment Act coming into force. That section did not include a meaning of ‘transfer of land’ and was relevantly in the following terms (Emphasis added):

(1)  Duty under this Act is not chargeable in respect of a transfer or agreement for the sale or transfer of land, …, used for primary production together with any other property that is an integral part of the business of primary production, if the Chief Commissioner is satisfied that—

(a)  the transferor, lessor or assignor, or the person directing the transferor, lessor or assignor, is a member of the family of the transferee, …, and

(b)  the land was land used for primary production in connection with a business carried on by the transferee, …, or by a member of the family of the transferee, lessee or assignee, (whether alone or with others) immediately before the transaction or the date of first execution of the instrument, and

(c)  the business is to continue to be carried on by the transferee, … (whether alone or with others).

  1. Accordingly, the submissions of the applicant that the word ‘transfer’ and the meaning of ‘transfer of land’ in section 274 should be given a different/separate meaning and application to that which appears in Chapter 2 of the Duties Act must be rejected as being misconceived.

  2. In this case, the dutiable transaction was an agreement for sale or transfer of dutiable property and section 9(2) of the Duties Act provides that:

  1. the property being transferred is the property agreed to be sold or transferred (section 9(2)(a)) – in this case it is the Property the subject of the Contract between Mrs Wallace and the applicant which was agreed to be sold;

  2. the applicant is the transferee (section 9(2)(b)); and

  3. the transfer of the land is taken to have occurred when the agreement for sale was entered (section 9(2)(c)). – in this case on 26 October 2023.

  1. Accordingly, in this case, the date on which the respondent must be satisfied of the matters in sections 274(2)-(4) is 26 October 2023, which is the date on which liability for duty arose. A pre-requisite to this is that the land the subject of the application for exemption is used for primary production, together with other property that is an integral part of the business of primary production. In this case there is no dispute that the Property the subject of the application for exemption satisfied this requirement.

  2. As the respondent has conceded that each of the matters specified in section 274(2)-(4) were satisfied as at the date on which liability for duty arose (26 October 2023), it is convenient to briefly deal with these to the extent they are relevant to this application.

Section 274(2) – inter-family connection between the transferor and transferee

  1. First, there is the requirement that the transferor (Mrs Wallace) be a member of the family of the person directing the transferee (the applicant). Pursuant to section 274(4A)(b)(ii) and clause 3.4(c)(1) of the Antap Trust Deed (as it applied on 26 October 2023), the persons directing the applicant at that time were the children of John Wallace, who were the grandchildren of Mrs Wallace. Hence, Mrs Wallace is a member of the family of the persons directing the applicant: Duties Act section 274(6) meaning of ‘member’ at para (c).

  2. Accordingly, this matter was satisfied as at the date liability for duty arose.

Section 274(3) – the Property was, immediately before 26 October 2023, land used for primary production in connect with a business carried on by the person directing the transferee, or a member of the family of the person directing the transferee

  1. On the material before the Tribunal, immediately before 26 October 2023:

  1. the Property was land used for primary production in connection with the Wallace family primary production business; and

  2. the person carrying on the Wallace family primary production business was John Wallace, as a member of the family of the persons directing the applicant (at that time the children of John Wallace): Duties Act section 274(6) meaning of ‘member’ at para (b).

  1. Accordingly, this matter was also satisfied as at the date liability for duty arose.

Section 274(4) - the Wallace family primary production business will continue to be carried on, whether alone or with others by the person directing the transferee

  1. In conceding that, at the time liability for duty arose, the applicant was entitled to the section 274 exemption, the respondent also accepted that, on the material before the Tribunal (which is the same material that was before the respondent at all times), the Wallace family primary production business would continue to be carried on by the persons directing the applicant (at that time John Wallace’s children) together with John Wallace.

  2. Section 274(4) does not specify any time for which the transferee or the person directing the transferee must continue to carry on the business. However, as noted above, where a transferee is not an individual, but acts in the capacity of trustee of a discretionary trust, there is a three year requirement in section 274(4A)(b)(ii). Section 274(4A) defines for the purpose of that section the meaning of the words ‘person directing’ a transferee or transferor.

Did the subsequent amendment to clause 3.4(c)(1) of the Antap Trust Deed mean that the three year requirement in section 274(4A)(b)(ii) could no longer be satisfied?

  1. The amendment to the Antap Trust Deed did not alter the dutiable transaction that was the agreement for the sale and transfer of the Property.

  2. The question is whether the amendment to clause 3.4(c) of the Trust Deed is such that it disentitled the applicant to the exemption because the three-year requirement in section 274(4A)(b)(ii) could not be met. That is, did the removal of John Wallace’s children as the persons entitled, as takers in default, disentitle the applicant to the exemption in section 274.

  3. It is convenient to briefly set out in full the terms of section 274(4A) and (4B) as section 274(5) provides that, except as provided in these subsections there are no other cases in which a person is considered to be directing a transferor or transferee:

(4A)  For the purposes of this section, the person directing a transferor or transferee is—

(a)  for a transferor or transferee acting in the capacity of—

(i)  executor of a deceased estate—the deceased person, or

(ii)  trustee of a bare trust—a person who is a named beneficiary of the trust, or

(iii)  trustee of a self managed superannuation fund—a person who is a member of the fund, or

(b)  for a transferor or transferee acting in the capacity of trustee of a discretionary trust—a person or persons who are entitled, as takers in default of appointment, to not less than a 25% interest in the capital of the trust, being an entitlement—

(i)  for a transferor—that existed for at least 3 years before the date of the transfer or that existed from the date of establishment of the trust, or

(ii)  for a transferee—that exists for at least 3 years after the date of the transfer, or

(c)  for a transferor or transferee acting in the capacity of trustee of a private unit trust scheme—a unit holder or unit holders in the unit trust scheme who hold the units beneficially and are entitled, as unit holders, to not less than 25% of the assets of the unit trust scheme on winding up, being an entitlement—

(i)  for a transferor—that existed for at least 3 years before the date of the transfer or that existed from the date of establishment of the trust, or

(ii)  for a transferee—that exists for at least 3 years after the date of the transfer, or

(d)  for a transferor or transferee that is a proprietary limited company—a shareholder or shareholders in the company who—

(i)  are beneficially entitled to the shares in the company, and

(ii)  are entitled to vote at meetings of the company, and

(iii)  are entitled as shareholders to not less than 25% of the assets of the company on winding up, being an entitlement—

(A)  for a transferor—that existed for at least 3 years before the date of the transfer or that existed from the date of incorporation of the company, or

(B)  for a transferee—that exists for at least 3 years after the date of the transfer.

(4B)  For a transfer involving a proprietary limited company or unit trust scheme (a subsidiary entity) that is owned by another proprietary limited company or unit trust scheme (the parent entity), a person is taken to be a person directing the subsidiary entity if the Chief Commissioner is satisfied that, had the parent entity been the transferor or transferee, as the case requires, the person would be the person directing the parent entity under subsection (4A).

  1. As noted above, paragraphs 274(4A)(b), (c) and (d) each contain a requirement for the ‘entitlement’ the subject of the relevant paragraph to be an ‘entitlement’ that existed for three years before the date of transfer in the case of the transferor and for three years after the date of transfer in the case of the transferee.

  2. In this regard the ‘entitlement’ the subject of each paragraph is as follows:

  1. section 274(4A)(b) expressly provides that where the transferor or transferee is acting in the capacity of trustee of a discretionary trust, the person directing the transferor or transferee, must be ‘a person or persons who are entitled, as takers in default of appointment, to not less than a 25% interest in the capital of the trust …’;

  2. section 274(4A)(c) expressly provides that where a transferor or transferee is acting in the capacity of trustee of a private unit trust scheme, the person directing the transferor or transferee must be ‘a unit holder or unit holders in the unit trust scheme who hold the units beneficially and are entitled, as unit holders, to not less than a 25% of the assets of the unit trust scheme on winding up, …’; and

  3. section 274(4A)(d) expressly provides that where a transferor or transferee is a propriety limited company the person or persons directing the transferor or transferee, must be ‘a shareholder or shareholders in the company’ who ‘are entitled to vote at meetings of the company’ and who ‘are entitled as shareholders to not less than a 25% of the assets of the company on winding up …’.

  1. As I have already noted, even if the matters in paragraphs 274(4A)(b),(c) or (d) are satisfied, the exemption will only apply where the transferor or the person(s) directing the transferor are a family member of the transferee or the person(s) directing the transferee (section 274(2)) and the matters in section 274(3)-(4) are satisfied.

  2. It is the respondent’s contention that, on its proper construction and application, paragraph 274(4A)(b), (c) and (d) require that the person(s) directing the transferor or transferee at the time liability for duty arises (i.e. the date of transfer) must be the same person(s) who directed the transferor in the three years prior to that time and/or the same person(s) who directs the transferee in the three years after this time.

  3. I accept that in many intergenerational family farm transfers for which the exemption applies, the person directing the transferor and/or transferee as at the date of transfer may be the same person who had directed the transferor prior to this date and/or the same person who is more likely to direct the transferee after that date. However, in my view there is no express requirement contained in sections 274(4A)(b),(c) or (d) that they be the same person.

  4. Section 274, as noted above, applies where a transferor or transferee is an individual or a family entity of the kind described in paragraphs 274(4A)(b), (c), and (d) that is ‘controlled’ by a family member. Paragraphs 274(4A)(b), (c), and (d) prescribes for the purpose of that subsection who controls the entity the subject of the relevant paragraph. Control is determined under these paragraphs by reference to the prescribed ‘entitlement’ relevant to the entity, be it the transferor or transferee and it is the person so ‘entitled’ who controls that entity. However, it does not say that it must, at all relevant times, be the same person so entitled. Such a requirement, as explained by the applicant, would mean that an entity that has been granted the exemption would become disentitled in the event, after the date of transfer, the family member named as being entitled died even though provision is made or could be made for another family member to be named as the person(s) entitled. That is, it would restrict family farm entities, who for various reasons, may wish to make a change to the relevant instrument as to which family member is to be entitled. This, in my view was not the intention of Parliament when enacting section 274 of the Duties Act, in 1997 when enacting the 2022 Amendment Act.

  5. As I have already noted, the amendment to clause 3.4(c)(1) of the Trust Deed named John Wallace as the person entitled, as taker in default and, re-numbered clause 3.4(c)(2) provided that, in the event John Wallace was no longer alive, the children of John Wallce became so entitled.

  6. John Wallace has always been a beneficiary of the Antap Trust, he is a member of the family of Mrs Wallace, and he is the father of his children. John Wallace is the sole director of the applicant and the person who has and continues to operate the Wallace family primary production business. Accordingly, it is difficult to see how the amendment to the Antap Trust Deed disentitled the applicant to the exemption in section 274 as the person directing the applicant continues to be a member of Mrs Wallace’s family and a person entitled, as taker in default of appointment, to not less than 25% interest in the capital of the Antap Trust. This in my view, is the essence of the applicant’s case.

  7. That is, even with the amendment of the Antap Trust Deed, the transfer of the Property in this case was clearly an intergenerational family farm transfer falling within the object and purpose of section 274 of the Duties Act. Indeed, the respondent now accepts it was a transfer that was exempt from duty at the time of transfer and had he so determined, on 15 January 2025, the necessity to make this application may not have arisen.

  8. In any event, given the concession of the respondent that the transfer of the property the subject of this application was exempt from duty it is appropriate to make a finding that the decision of the respondent made on 15 January 2024 is not the correct and preferable decision and should be set aside.

  9. In my view, in the absence of the respondent having had an opportunity to consider whether, based on the proper construction and application of section 274(4A)(b)(ii), the amendment of the Antap Trust Deed disentitled the applicant to the exemption, this aspect of the matter should be remitted to the respondent for reconsideration in accordance with these reasons for decision.

Conclusion and orders

  1. For the reasons set out above:

  1. I note the concession of the respondent that the assessment decision made on 15 January 2024 is not the correct and preferable decision and, on this basis, I have decided to set aside the respondent’s assessment decision.

  2. I have decided to remit to the respondent, for reconsideration, in accordance with these reasons for decision and the proper construction and application of section 274(4A)(b)(ii) of the Duties Act, the issue as to whether the amendment to the Antap Trust Deed disentitled the applicant to the exemption in section 274 of that Act.

  1. I make the following orders:

  1. Pursuant to section 63(3)(d) of the Administrative Decisions Review Act 1997, the assessment for duty made by the respondent on 15 January 2024 is set aside and, remit for reconsideration by the respondent the issue as to whether the amendment to the Antap Trust Deed disentitled the applicant to the exemption in section 274 of the Duties Act 1997 (NSW), in accordance with these reasons for decision and the proper construction and application of section 274(4A)(b)(ii) of that Act.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.


Registrar

Decision last updated: 13 June 2025

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