Miscellaneous 2019

New Victorian economic entitlement duty

Source: The Tax Specialist Journal Article

Published Date: 1 Aug 2019


Property developers, investors and service professionals may need to review and restructure development services arrangements so that fees calculated by reference to the distributions, receipts, profits or proceeds of a landowner's land are not a synthetic acquisition of an interest in the land subject to duty. The economic entitlement provisions establish an economic equivalence alternative postulate test. The alternative postulate test should not be limited to equivalent profit effect and should include other rights, obligations and risks of similarity, fungibility or functional equivalence to land ownership. An alternative postulate test based on other rights, obligations and risks provides a predictable basis to exclude from duty arrangements that are not equivalence to land ownership. More informative guidance on the scope of the economic entitlement test and equivalence is needed.

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Miscellaneous 2019

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