Revenue Ruling LT-016 - Principal Place of Residence Exemption Land Held on Trust (LT-016) [2004] VICSROLT 1 (1 July 2004)

Preamble

1. The purpose of this ruling is to outline some of the

more common scenarios where land owned by an
eligible trustee may be exempt from land tax under the
principal place of residence (PPR) exemption contained
in Section 13A of the Land Tax Act 1958 ('the Act').

2. This ruling should be read in conjunction with all the

provisions of Part IIA of the Act, which may have an
impact on the applicability of the PPR exemption.

3. Section 13A of the Act provides an exemption from

land tax for:

·

land owned by a natural person that is used and
occupied as the PPR of that person; and

·

land owned by a trustee of a trust that is used
and occupied as the PPR of a natural person
who is a beneficiary of the trust.

4. Section 13AA of the Act provides the following

definitions for Part IIA:

"trustee" means trustee within the meaning of section
3(1) but does not include:

(a)

a trustee of a discretionary trust; or

(b)

a trustee of a trust to which a unit trust scheme
relates; or

(c)

a liquidator;

"discretionary trust" means a trust under which the
vesting of the whole or any part of the trust property:

(a)

is required to be determined by a person either
in respect of the identity of the beneficiaries or
the quantum of interest to be taken, or both; or

(b)

will occur in the event that a discretion conferred
under the trust is not exercised;

"unit trust scheme" means an arrangement made for the
purpose, or having the effect, of providing facilities for
participation by a person, as a beneficiary under a trust,
in any profit or income arising from the acquisition,
holding, management or disposal of property under the
trust.

A person is not a trustee of a trust relating to land by
reason only that the land is subject to an implied or
constructive trust.

Ruling

5. To qualify for the PPR exemption, the land must be

owned by a trustee and must be used and occupied as
the PPR of a natural person/s who is a
beneficiary/beneficiaries of the trust. Generally they
(the beneficiary) must use and occupy the land for a

period of at least 6 months commencing prior to 1
January of the year of assessment.

6. Based on the above definitions, the PPR exemption is

limited to certain types of trusts and is not available to
trustees of discretionary trusts, unit trust schemes or a
liquidator.

7. Land held on trust by a trustee may be eligible for the

exemption where:

·

the land is held on trust for an incapacitated
person/persons residing at the property;

·

the land is held by a trustee appointed under a
will on trust for all or some of the beneficiaries
who occupy the land as their PPR;

·

land under a will that is vested in a trustee on
trust for a life tenant who occupies the land as
their PPR;

·

land held by a trustee of a trust with a defined
beneficiary/beneficiaries (such as a bare trust),
where the beneficiary/beneficiaries under the
trust occupies the land as their PPR.

8. If there are a number of beneficiaries under a trust and

not all the beneficiaries occupy the land as their PPR,
the exemption is apportioned on the basis of the
proportionate interest held in the land by the
beneficiary/beneficiaries occupying the land.

9. To obtain a PPR exemption for land held on trust, the

trustee must provide the Commissioner with the
following:

a)

details of:

i. the trust;

ii. the trustee;

iii. the land held on trust;

iv. all beneficiaries entitled to that land;

v. all beneficiaries entitled to that land who

occupy the land; and

b)

copies of:

i. the trust deed (including any schedules); and

ii. any amendments and alterations to the trust

deed.

10. Please note that rulings do not have the force of law.

Each decision made by the State Revenue is made on
the merits of each individual case having regard to
any relevant ruling. All rulings must be read subject
to Revenue Ruling GEN.01.

Revenue Rulings

LT.016

Commissioner of State Revenue

July 2004

76 775 195 331

Land Tax

Principal Place of Residence Exemption Land Held on Trust

LT.016