A right to remain in the home as long as she wishes. Life estate or personal right? The words decided the character, but the evidence decided the case.
Your client’s mother dies. She left your client - a disabled woman who has lived in the family home for 40 years - a right to “remain in the home as long as she wishes.”
Life estate or personal right? It matters. But the case was not lost where you would expect. Morgan v Chief Commissioner of State Revenue [2026] NSWCATAD 149.
The facts
The Applicant co-owned land with her mother as tenants in common since the 1980s. The home was modified for her disability. The mother’s will left her half interest to her two children - a quarter each [9]. It provided that the Applicant “shall not be required to vacate the home against her wishes and may remain in the home as long as she wishes,” provided she paid outgoings and kept the property in repair [11].
Under a deed of family arrangement, the brother gave up his quarter for cash. The Applicant ended up with 100%. Revenue assessed duty of $12,974.50 on the acquired quarter [17]. The Applicant argued s 63(2) of the Duties Act 1997 (NSW) entitled her to a greater reduction because her entitlement under the will included what she said was a life estate valued at $657,000.
The life estate question
The Tribunal found the will did not create a life estate. A life estate is a right to “use and occupy” land for life. A right to “remain” is a personal right of occupancy - an irrevocable licence [38, 46].
The will’s own language confirmed this. Why say the Applicant “shall not be required to vacate” if she held a life estate? A life tenant cannot be made to leave. That clause only makes sense if the right is personal enough to need protecting [44]. A life estate vests regardless of the holder’s wishes. This right only subsisted while the Applicant wished to stay - a personal right [45].
The Tribunal followed Askew [2015] NSWSC 192 and Feeney [2008] NSWSC 890. “Use and occupy” creates a life estate. “Remain” or “reside” does not.
Where this case was actually lost
The Applicant did not just lose on the law. She lost on the evidence.
The valuation tendered valued a presumed life estate [56]. Having found no life estate, the Tribunal could not accept it as evidence of the value of the personal right she actually held [59-60].
Then at [67]: had there been a valuation of the actual right to remain on the land, “such evidence may well have had a bearing on the workings of s 63(2).” The Tribunal did not say the case was hopeless. It said the wrong evidence was led.
Two points. First, if drafting a will and you intend a life estate, use “use and occupy”. Not “remain”. Not “reside”. The words change the legal character of the interest. Second, if running a duty case on valuation, value the right your client actually holds - not the right you wish they held. This case may have turned on that gap.
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.