$253,055 in duty on a draft that did not transfer anything. It should have been $100.
The solicitor uploaded an unsigned, undated draft transfer to eDuties on a routine trustee change. The Commissioner did not wait for the transfer. He locked in the upload date as the liability date - when the trust deed did not yet comply - and assessed full duty before the transfer even happened.
The Supreme Court said he was wrong.
Forever Grateful Holdings Pty Ltd v Chief Commissioner of State Revenue [2026] NSWSC 761
What Happened
Under s 54(3) of the Duties Act 1997 (NSW), a transfer of trust property on a change of trustee can attract $100 nominal duty, provided no trustee is or can become a beneficiary, among other requirements.
The solicitor uploaded an unexecuted transfer to eDuties on 24 May 2024. The trust deed did not comply with s 54(3). It was amended on 24 June. The transfer was digitally signed on 15 July. By then, the requirements were met [4].
The Commissioner assessed on 26 June [6].
Under s 12(4)(b), an electronic registry instrument not digitally signed is “taken to be first executed” when the Commissioner first receives information about it. The draft arrived 24 May - the liability date, when the trust did not comply. Assessment: $93,055 ad valorem plus $160,000 surcharge purchaser duty [34].
Where the Commissioner Went Wrong
Hmelnitsky J held that s 12(4) is “epexegetical to s 12(2)” [69]. It explains when an electronic registry instrument is taken to be first executed, but only where that instrument effects a transfer. It does not cause an instrument that does not effect a transfer to create liability as if it did [63].
The 24 May draft was “just that: unexecuted”. Undated. Unsigned. No “alteration in legal or equitable rights” [72].
That construction would produce an absurd disparity. An unsigned electronic draft on eDuties would trigger immediate liability. An identical unsigned paper draft would not - under s 295(1), a paper instrument is first executed only when first signed. Contrary to s 10 - duty is payable regardless of form [71].
Legislative history confirmed this. Section 12(4)(b) was a “minor” amendment to address unsigned instruments that do effect transfers - not drafts to be signed later [80]-[83].
Assessment revoked [84]. Transfer assessed at $100.
Why This Matters
First, uploading a draft to eDuties does not trigger duty. Liability arises when the transfer is effected - here, when digitally signed.
Second, get trust deed amendments done before execution. The s 54(3) requirements were met at execution and that counted.
Third, make sure the right entity signs amendments. The first deed here was signed by the former trustee - no longer trustee. Ineffective [25].
Have you dealt with timing issues on trustee changes?
General information only. This note was written as at 3 July 2026 and the law may have changed since. It is not legal or tax advice, does not take account of your circumstances, and must not be relied upon as a substitute for advice on your own matter.