Reading v Federal Commissioner of Land Tax

The appellant, the sole trustee of the will of George Reading, sought a determination from the High Court regarding land tax assessments. The dispute arose from the Commissioner of Land Tax's refusal to allow multiple deductions for beneficiaries' shares in the testator's residuary real estate, and a deduction for an annuity payable to the testator's widow. The testator's will established trusts for his widow and children, with the residuary estate ultimately to be held for his children who attained the age of 21 years, in equal shares. At the time of assessment, all surviving children had attained majority.

The primary legal issue before the Court was whether the trustee was entitled to a statutory deduction under section 33 of the Land Tax Assessment Act 1910 in respect of each of the vested remainder interests of the testator's four surviving children. A secondary issue concerned the entitlement to a deduction for the annuity payable to the widow under section 34 of the Act. The Commissioner had allowed only one deduction of £5,000 for the shares and no deduction for the annuity, resulting in a taxable value of £10,000.

The Court, in answering the first question, relied on the authority of *Archer v. Federal Commissioner of Land Tax*. It held that the trustee was entitled to a deduction in respect of each of the children's shares, as each child held a vested remainder interest. The Court found it unnecessary to answer the second question regarding the deduction for the annuity.