All Australian jurisdictions have mechanisms for the deeming of the value of transactions for tax and duty purposes.

For example, for duty purposes in Queensland the dutiable value of a transaction is calculated on the higher of the consideration for the dutiable transaction or the unencumbered value of the dutiable property that is the subject of the transaction. Recent cases have highlighted that the determination of the “consideration” for dutiable transactions is not as straight forward as it may seem.


The dutiable value of transactions may be miscalculated by:

  • errors in the calculations themselves – such as adjustments to the purchase price or GST; or
  • failing to include non-cash “consideration” – such as assumption of liabilities;
  • failing to include a monetary amount where that amount arises from other components of the transaction or the payment of a further amount is contingent upon a condition subsequent being satisfied.


Failing to correctly calculate the dutiable value of transactions, and thus failing to pay the correct duty liability, will prompt state revenue offices to audit transactions and issue reassessment notices. Increased duty liabilities will normally not be budgeted for by the parties.


For income tax purposes, the market value of assets may need to be determined in order to calculate a tax liability, eg. for CGT purposes where the proceeds received are less than the market value or the dealing is not arm’s length.

The ATO has published a guide “Market valuation for tax purposes” to assist taxpayers establish the market value of assets.


The A New Tax System (Goods and Services Tax) Act 1999 (Cth) sets out rules for determining the GST inclusive market value of considerations and can also deem a value for transactions between “associates”.


In Lend Lease Development Pty Ltd v Commissioner of State Revenue [2014] HCA 51 (Lend Lease Case), the High Court was asked to consider, on appeal, what was meant by “consideration” for the transaction in question.

Here, Lend Lease Development Pty Ltd (Lend Lease) and Victorian Urban Development Authority (VicUrban) entered into a development agreement. Under the development agreement, Lend Lease was required to reimburse some infrastructure costs, and pay a share of their proceeds from the developed land to VicUrban (together, contribution payments). Annexed to the agreement were individual sale contracts for a number of parcels of land which VicUrban agreed to transfer to Lend Lease subject to the terms of the development agreement.

It was not disputed that this transaction was a dutiable transaction. Ultimately, the issue for the High Court was deciding whether the “consideration” for this dutiable transaction was:

  • the amounts set out under the contracts for sale of the land; or
  • the amounts stipulated under the contracts for sale of the land plus the sum of the contribution payments payable to the government under the development agreement. 

The High Court unanimously found that the Commissioner was entitled to assess duty by reference to payments made under the specified land sale contracts as well as the contribution payments to be made under the development agreement. This was because the payments under the land sale contract and these contribution payments formed a single, integrated and indivisible transaction for the concurrent sale and development of the land.


Clients have the difficult task of assessing and identifying whether the “consideration” for a transaction is limited to the purchase price, or includes the value of any other promises given. A duty, GST or income tax liability may be higher than originally anticipated to account for the non-monetary consideration also received.


As to the Lend Lease Case scenario, parties to dutiable transactions should be reviewing their development arrangements and drafting future development arrangements with caution. They should also seek advice from specialists to ensure that the appropriate amount of duty, GST or income tax will be budgeted for from the onset of the arrangements.

In particular, as a result of the Lend Lease case, State revenue offices will continue to scrutinise transactions to ensure that duty is properly assessed and paid on all the consideration.

For other taxes, authorities will continue to audit taxpayers to ensure the consideration received (both monetary and non-monetary) is correctly returned or subject to taxation. Failing to properly account to the relevant authority or authorities could expose clients to interest and penalties in addition to the tax which might not have been accounted for.