CGT events occurred on transfer of land pursuant to joint venture - Taras Nominees
30 Jan 2014
The Federal Court (Kenny J) has held that CGT events E1 and A1 occurred when the taxpayer transferred land to a company to be held upon trust pursuant to the terms of a joint venture agreement that the taxpayer had entered into with two other parties with a view to the development of that land and other land owned by the other parties. Contrary to the stated intention of the taxpayer that there was to be no change in beneficial ownership of the land, the Court held that the effect of the transfer was that the company held the land upon trust for the taxpayer and the two other parties equally and collectively.
Accordingly, the taxpayer made a capital gain at the date of transfer, notwithstanding that there was no monetary proceeds received at that time.
Taras Nominees Pty Ltd as Trustee for the Burnley Street Trust v FCT  FCA 1 (Federal Court, Kenny J, 14 January 2014).