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New Victorian economic entitlement duty

Published on 01 Aug 19 by "THE TAX SPECIALIST" JOURNAL ARTICLE

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.

Author profile

Ronald Jorgensen CTA
Ron principally consults on Commonwealth and State tax laws, tax dispute resolution and compliance enforcement. Ron specialises in trusts and trust disputes, succession and asset protection, business and investment structuring and tax sensitive commercial and property transactions. Ron is an Accredited Specialist Tax Law and member of the Tax Law Advisory Committee with the Law Institute of Victoria. He is a member of the Property and Commercial Law Committee of the Law Society of Tasmania. Ron is a Chartered Tax Advisor and member and former chair of the States Taxes Committee (Vic) of The Tax Institute. Ron was recognised by Doyle’s Guide Leading Tax Lawyer - Victoria for 2015 to 2021 and Best Lawyers for tax law - Australia 2021 and Global 2021. - Current at 16 July 2021
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