Birchstone Brief for the week ended 29 April 2022

ATO Updates


The ATO has issued CR 2022/40 – Over The Wire Holdings Ltd – Scrip for scrip roll-over.

State Taxes

Land Tax (Vic) – Ruling on charitable institutions exemption released

The State Revenue Office of Victoria has released an updated Ruling on the land tax exemption afforded to charitable institutions. The updated Ruling incorporates the effect of recent amendments to the charity exemption under the Land Tax Act 2005 (Vic) and applies from the 2022 land tax year onwards.


Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue (NSW) [2022] NSWSC 430 – Land tax

The New South Wales Supreme Court has upheld a horse breeding and racing business’ challenge to the assessment of land tax upon some of the properties used in its operation.

The taxpayer ran a thoroughbred horse stud in NSW that bred, raced and sold horses. The Chief Commissioner charged the properties used in the business with land tax for the 2014 to 2019 land tax years. The taxpayer challenged the assessment, contending two of its four properties were exempt as ‘land used for primary production’ under section 10AA(3)(b) of the Land Tax Management Act 1956 (NSW) on the basis that its dominant use of the land was to maintain animals for the purpose of selling them or their natural increase or bodily produce.

The Court held that the taxpayer’s dominant use of the relevant land was to maintain animals for the purpose of selling their bodily produce or natural increase and revoked the land tax assessments in issue, despite acknowledging that a substantial part of the land was used for training racehorses. The Court concluded that when viewed as a whole the taxpayer was running an integrated operation in which the race training was undertaken to maximise revenue from its horses’ nomination fees and progeny. The court also held that the phrase ‘purpose of selling’ in section 10AA(3)(b) does not require land to be used with a ‘dominant purpose’ of sale to qualify for exemption. Rather, section 10AA(3)(b) must be considered as a whole.


The taxpayer has applied to the High Court for special leave to appeal the Full Federal Court’s decision in FCT v Burswood Nominees Ltd as trustee for Burswood Property Trust [2021] FCAFC 151 (covered in the Birchstone Brief for the week ended 27 August 2021).


Determination issued

The Minister for Defence has issued a Determination pursuant to section 105-120 of Schedule 1 to the Taxation Administration Act 1953 (Cth) that provides for a refund of indirect taxes paid in respect of a range of acquisitions made by or on behalf of the visiting forces or governments of the Independent State of Papua New Guinea, the Republic of Singapore and the United States of America engaged in defence-related activities.


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