75.8 per cent acquired while public, topped up to 95.26 per cent five months later. Duty on the lot: $19,893,540.
Your client subscribes for 75.8% of a widely held property trust holding $380 million of NSW land. Less than 90% in a public landholder: not dutiable. Five months later your client tops up to 95.26%. Surely a public-period acquisition cannot be aggregated once the trust converts to private?
The Supreme Court has held duty is payable on the entire 95.26% at the general rate. $19,893,540. ISPT Pty Ltd as Trustee of ISPT Retail Australia Property Trust v Chief Commissioner of State Revenue [2026] NSWSC 424.
The two acquisitions
FSREC was a widely held stapled unit trust with around 3,916 members, a “public landholder” under s 146 Duties Act 1997 (NSW) until February 2022 [16, 18].
In February 2022 ISPT took 75.8% of FSREC by subscribing for new units paired with a member redemption [17-20]. The 90% threshold for a public landholder was not reached, so no duty arose. The subscription took ISPT past 20% and converted FSREC to a private landholder [21].
In July 2022 ISPT topped up to 95.26% via a second withdrawal offer [22-23]. The Commissioner aggregated under s 155(3) and assessed $19,893,540 on the 95.26% [4, 28].
Aggregation across the public-private line
ISPT argued s 155(3) only aggregates acquisitions made while the landholder was private. The Court rejected that.
Section 155(3) refers to “other acquisitions during the statement period”. Read with s 152(3)(a), those words capture acquisitions in the same landholder during the statement period, regardless of its status when the prior acquisition occurred [105, 106]. Landholder status is fixed at the date of the relevant later acquisition [101, 102]. ISPT’s reading would open obvious avoidance: 89%, convert, top up 6%, duty on 6% [91].
Section 163H was refused. The discretion relieves where Ch 4 captures what it did not intend to capture, with a key consideration being any change in the underlying economic interest in the dutiable property [118-119]. ISPT’s interest plainly increased. It could have reached 90% in one move for the (then) s 156 concessional 10% rate, or waited more than three years [156].
The practitioner lesson
First, the public landholder concession evaporates the moment the trust converts to private. If your client cannot reach 90% in one step, get advice on timing first.
Second, watch the three-year statement period. A second acquisition more than three years later stands alone under s 155(1).
Third, the dollar exposure on these facts: $19,893,540 on the aggregated 95.26%, against about $2,088,420 had it been a single acquisition while FSREC was still public [142]. (The s 156 concession was repealed from 1 July 2023.)
General information only. This note was accurate when written. The law may have changed since and the note is not updated. 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. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.