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A taxpayer hasnbeen unsuccessful before the Queensland Civil and Administrative Tribunal in anland tax dispute in arguing that there was a “constructive trust” in relationnto three residential properties. The taxpayer, a father, had purchased thenproperties for each of his three adult children to live in. There werenagreements that the children would pay their parents rent and, upon the deathnof both parents, as specified in mutual wills, the property would be left tonthe respective child.
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The Queensland Commissioner of State Revenue assessednland tax on the aggregate value of the three properties as at 30 June 2013 andn30 June 2014 respectively. The Tribunal affirmed the Commissioner’s decision,nholding that the taxpayer was the “owner” of the properties and it was notnconvinced that there was a “constructive trust”. Therefore, it held thenexemption under the Land Tax Act 2010n(Qld) to assess separately trust land did not apply. In this case, the Tribunalnhinted at the possibility that in future assessments the taxpayer could, onnsufficient evidence, persuade the Commissioner or Tribunal otherwise.
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TIP: For parents looking to assistntheir adult children with buying homes, this case highlights the need tonconsider land tax implications. It is important to note that the land taxnregimes differ from state to state. Please contact our office for assistance.
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Important: Clients should not act solely on the basis of the material contained in Update. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. This update is issued as a helpful guide to clients and for their private information.
