Vic stamp duty: transactions restructuring super funds exempt
The Victorian Supreme Court has held that transactions effecting a restructuring of super funds in which two brothers had interests were exempt from duty.
Two brothers (Colin and Paul) had interests in three complying super funds (the DLF Fund, the DLF Executive Fund and the JT Fund). The investments held by the funds included units in the L Unit Trust and the SM Unit Trust. Both trusts were “landholders” as defined in s 71(1) of the Duties Act 2000 (Vic) (“the Act).
The three super funds were restructured so that Paul took control of the DLF Fund (and was its sole member) and Colin took control of the other two funds (and was the sole member of each fund). As a consequence, the JT Fund and another unit trust, the FF Unit Trust, increased by 10.25 per cent and 12.09 per cent, their underlying interests in the L Unit Trust. In addition, the DLF Fund increased by 22.1 per cent its holding in the SM Unit Trust.
The issue for the Court was whether relevant transactions were exempt from duty by virtue of ss 89D(a) and 40 of the Act.
The Court concluded that:
- the acquisition by the JT Fund of its interest in the L Unit Trust was an exempt acquisition
- the acquisition of a 12.09 per cent interest by the FF Unit Trust was properly aggregated with the acquisition of a 10.25 per cent interest by the JT Fund and that the 12.09 per cent interest acquired by the FF Unit Trust was dutiable and
- duty was not payable on the 22.34 per cent aggregated interest.
In coming to this conclusion, the Court held that the exemption in ss 89D(a) and 40 can apply where the transaction involves a redemption and/or issue of units or shares and there was a “transfer” of dutiable property to a complying fund for the purposes of s 40. (Razzy Australia Pty Ltd & Anor v Commissioner of State Revenue  VSC 124,
Vic Supreme Court, Delany J, 17 March 2021.)