10 June 2021

The appeal against a decision of a Judge (The Honourable Justice Blue) of the Supreme Court which primarily allowed an appeal against an assessment of land tax made by the Commissioner of State Taxation (the “Commissioner”) in respect of land at Lewiston and Burton was dismissed.

In dismissing the Commissioner's appeal, the Full Court held:

1. The phrase, "the business of primary production" in section 2 of the Land Tax Act 1936 (the “Act”) is capable of referring to a broad business of primary production carried across several parcels of land. Acts done and the intention held with respect to the land are both relevant objects of inquiry. Where the inquiry is as to the use of the land for the business of primary production, it is appropriate to consider the deployment of the land in that broader context.
2. The primary judge did not err in his conclusion that the Burton land was used for the business of primary production as at 30 June 2013.
3. It was open to the primary judge to characterise the arrangement between the respondents and the person who had provided all of the services, paid the expenses and made the decisions with respect to cropping the Burton land as a joint venture.
4. The primary judge did not err in his construction of the definition of “relevant business” in section 5(13) of the Act.

LAND TAX – Land Tax Act 1936 – Exceptions and Exemptions – Primary Production Land

Commissioner of State Taxation v Takhar & Anor [2021] SASCA 58

30 June 2020

The appeal against the decision of the Treasurer to disallow the objection by Bhupinder and Jaswinder Takhar (the “Appellants”) to a land tax assessment in respect of land at Lewiston and Burton on the ground that the land was exempt from land tax under primary production exceptions contained in the Land Tax Act 1936 (the “Act”) was allowed and the land tax assessment set aside.

The Appellants have since 1993 owned 8 hectares of land at Lewiston the subject of three Certificates of Title (lots 51, 52 and 53) and since 1991 owned 19 hectares of land at Burton. They have also since 1982 and 1985 owned 21 hectares and 30 hectares of land at Gawler respectively, which they have used for raising chickens for meat and growing crops, and since 1993 they have owned 32 hectares of land at Mallala, which they have since about 2004 used for growing crops

The Lewiston land was used for egg production (along with Mallala) until about 2004. Since then, lot 53 has been sown with crops from time to time; lot 51 has been let to tenants; and lot 52 has been largely vacant. The Burton land has been used from time to time for cropping.

The Commissioner of State Taxation issued a notice of assessment of land tax in respect of the Lewiston land for the years ended 30 June 2010 to 30 June 2014 and the Burton land for the year ended 30 June 2014.

In allowing the Appellants appeal, the Honourable Justice Blue held:

1. Lot 53 was used for the business of primary production at the relevant times and was thereby excepted from land tax under section 4(1)(l) of the Act.
2. Lots 51 and 52 were not used for the business of primary production at the relevant times and were liable to land tax.
3. Lots 51, 52 and 53 comprise separate parcels of land for the purpose of the primary production exception.
4. The Burton land was used for the business of primary production at the relevant time.
5. The first Appellant was engaged on a substantially full time basis in a relevant business for the purpose of the primary production exemption in respect of the Burton land.

The Burton land was eligible for exemption from land tax under section 5(10)(g) of the Act.

LAND TAX – Land Tax Act 1936 – Exceptions and Exemptions – Primary Production Land

Takhar v Commissioner of State Taxation [2020] SASC 119

22 April 2015

Appeal allowed - Land tax assessments for 2005-06 and 2006-07 set aside - Not open to contend that there was no assessment - The Commissioner made valid assessments - The Commissioner did not make a decision in regard to a primary production exemption because Liapis had not applied for such - Liapis was using the land for the business of primary production - Thomas Liapis was engaged on a substantially full-time basis (either on his own behalf or as an employee) in the business - Liapis failed to prove that the business of primary production was its main business as at June 2005 but did prove that it was as at June 2006.

LAND TAX – Land Tax Act 1936 - Exemptions - Primary production land

T & S Liapis Pty Ltd v Commissioner of State Taxation [2015] SASC 63

13 November 2007

Appeal allowed – the Court has to have regard to perceived purpose of exemption – given the context, the relevant exemption provisions should be interpreted liberally – paragraphs 4(1)(k)(i) and (ii) encourage and protect the pursuit of certain sporting activities –paragraph 4(1)(k)(i) does not ask the purpose for which land is used, but the purpose for which land is held – it is couched in present tense and applies at the time when exemption is sought – motivation for forming a holding association and purpose for holding land are two distinct questions with potentially very different answers – “purpose” is not limited to intermediate purposes but includes the purpose ultimately being served - facilities incidental or ancillary but nonetheless furthering the purpose of the statutory activity can be considered as furthering that activity – yachting is an athletic sport within the meaning of the exemption – the land is held mainly for the purpose of yachting – no need to make finding as to whether land is held mainly or wholly for yacht racing pursuant to paragraph 4(1)(k)(ii).

LAND TAX – Land Tax Act 1936 - Exemptions - whether land exempt from land tax – whether land is held mainly or wholly for the purpose of yachting pursuant to paragraph 4(1)(k)(i) of the Act – whether yachting is an athletic sport or exercise for the purposes of paragraph 4(1)(k)(i) – or alternatively, whether land is held mainly or wholly for the purpose of yacht racing pursuant to paragraph 4(1)(k)(ii) of the Act – whether land is held mainly for asset protection purposes and therefore subject to land tax.

RSAYS Ltd v Commissioner of State Taxation [2007] SASC 398

22 December 2017

The appeal against the decision of the Minister for Finance to disallow the objection by ACN 068 691 092 Pty Ltd (“ACN”) to assessments made by the Commissioner of State Taxation (the “Commissioner”) was dismissed.

In June 2010, ACN transferred a 10 per cent interest in five properties to different members of the Scragg family and/or a company owned and controlled by them and retained a 100 per cent interest in a sixth property. The result prima facie was that ACN was not liable to pay land tax based on aggregation pursuant to subsection 13A(3) of the Land Tax Act 1936 (SA). However, ACN would be liable to pay land tax on an aggregated basis if the Commissioner formed the opinion that a purpose for the transfers was to reduce land tax.

In 2013, the Commissioner issued assessments and amended assessments assessing the six properties principally owned by ACN to land tax on an aggregated basis as a result of the Commissioner having formed the opinion that a purpose for the transfers was to reduce land tax.

In dismissing ACN’s appeal, the Honourable Justice Blue held that a purpose for the transfers was to reduce land tax.

LAND TAX – prescribed interest in land greater that 5% but less than 50% – a purpose for creating the prescribed interest was to reduce land tax – disregard prescribed interest – assessment of land tax on an aggregated basis

ACN 068 691 082 Pty Ltd v Commissioner of State Taxation [2017] SASC 195

24 April 2013

Appeal dismissed – the minor interests in land were created for the predominant purpose of reducing land tax – construction of Section 13A(3) of the Land Tax Act 1936 is rejected because it lacks textual support and would obstruct the manifest purpose of the provision.

Catchwords: LAND TAX – La

LAND TAX – Land Tax Act 1936 – whether the purpose, or one of the purposes, of the creation of the minor interests was to reduce the amount of land tax payable in respect of land - Section 13A of the Act – Commissioner may determine that minor interest is to be disregarded.

Kyren Nominees Pty Ltd v Commissioner of State Taxation [2013] SASC 58

Appeal allowed - Assessments of land tax for the 2008-09 and 2009-10 financial years in respect of the land at North Adelaide set aside.

Appeal allowed - Assessments of land tax for the 2008-09 and 2009-10 financial years in respect of the land at North Adelaide set aside.

LAND TAX – Land Tax Act 1936 – whether the land was exempt from land tax in the 2008/2009 and 2009/2010 financial years under section 5(10)(a) of the Act on the basis that it was the principal place of residence of the second appellant - Section 13A of the Act – Commissioner may determine that minor interest is to be disregarded.

Kalomel Nominees Pty Ltd & Anor v Commissioner of State Taxation [2012] SASC 10