The recent decision of Ackinclose v Commissioner of State Revenue [2026] QCAT 312 provides important guidance on the circumstances in which land held by an SMSF may be aggregated with land held by a discretionary family trust for Queensland land tax purposes. The matter concerned a husband and wife who acted as trustees of both an SMSF and a discretionary family trust, with the Commissioner contending that the beneficiaries’ interests were ‘the same’ for the purposes of s 20(2)(b) of the Land Tax Act 2010 (Qld) (LTA).
In what appears to be the first reported decision on the operation of s 20(2)(b) of the LTA in an SMSF context, Member McVeigh of the Queensland Civil and Administrative Tribunal concluded that the relevant landholdings of the SMSF and the discretionary trust should not be aggregated.
This article examines the competing arguments advanced by the parties, the Tribunal’s reasoning and the implications of the decision for advisers dealing with trust structures and Queensland land tax. We also consider why the reasoning adopted by the Tribunal may leave scope for aggregation in different factual circumstances involving SMSFs.
Facts
For the purposes of the relevant land tax years (2021–22, 2022–23 and 2023–24), Paul Ackinclose (Paul) and Carley Ackinclose (Carley) were:
- the trustees of Ackinclose Investments Trust (Trust); and
- the trustees and members of the Ackinclose Superannuation Fund (Fund).
Both the Trust and the Fund held taxable land in Queensland. The Trust was a discretionary trust under which Paul and Carley each received distributions of income on a 50:50 basis during the relevant years. Likewise, the Fund had only two members, with Paul and Carley having similar, although not identical, member balances.
Under s 20(1) of the LTA, land held by a trustee is generally assessed separately for land tax purposes, as if the land subject to that trust were the only land owned by the trustee. However, an exception applies where the requirements of s 20(2) of the LTA are satisfied, in which case the taxable land held on trust is aggregated under s 20(3).
The Commissioner issued land tax assessments on the basis that the exception in s 20(2)(b) of the LTA applied because the beneficiaries’ interests in the Trust and the Fund were ‘the same’. That is to say that the landholdings of the Trust and the Fund were assessed together, creating a higher land tax liability than there would have been had the Trust and the Fund been separately assessed.
Paul and Carley objected to the higher assessment. Following the Commissioner’s disallowance of their objections, they applied to the Tribunal for review of the objection decisions.
The Commissioner’s position
The Commissioner argued that s 20(2)(b) of the LTA should be construed as an anti-avoidance provision directed at preventing taxpayers from reducing land tax by holding land through multiple trusts with the same beneficiaries. Consistent with that purpose, it was submitted that the provision should not be construed in a way that would permit aggregation to depend upon variable percentage interests between trusts.
The Commissioner also emphasised that s 20(2)(b) refers only to the beneficiaries’ ‘interests’, not their ‘trust interests’. It was argued that this reflected a deliberate legislative choice. Accordingly, the Commissioner contended that the relevant inquiry was whether the identity of the beneficiaries was the same, rather than whether the proportions of those interests were identical. On that basis, the Commissioner contended that s 20(2)(b) applied because Paul and Carley were the relevant beneficiaries of both:
- the Trust (having received discretionary distributions during the relevant period and therefore being taken to be beneficiaries under s 24 of the LTA); and
- the Fund (as its only members).
The taxpayers’ position
The taxpayers argued that the Commissioner’s construction of the LTA gave insufficient weight to the statutory requirement that the beneficiaries’ interests be ‘the same’. They submitted that this required a comparison of both the nature of the beneficiaries’ interests and, where relevant, the proportion of those interests.
In relation to the Trust, Paul and Carley were discretionary beneficiaries whose entitlement depended upon the exercise of the trustee’s discretion and who, having received 50:50 distributions during the relevant period, were taken to be beneficiaries under s 24 of the LTA. By contrast, their interests in the Fund were governed by the Superannuation Industry (Supervision) Act 1993 (Cth) and reflected the value of their respective member interests.
Accordingly, the taxpayers submitted that their interests in the Trust and the Fund were neither qualitatively nor quantitatively the same. Their member balances in the Fund (48:52) were not identical to their respective interests in the Trust (50:50), with the consequence that s 20(2)(b) did not apply.
The decision
The Tribunal rejected the Commissioner’s construction of s 20(2)(b), holding that the beneficiaries’ interests in the Trust and the Fund were not ‘the same’ for the purposes of the LTA.
In concluding that the beneficiaries’ interests were not ‘the same’, Member McVeigh observed that the word ‘same’ means ‘identical’ and identified a number of qualitative and quantitative differences between the interests, including that:
- the source of the interests differed, with SMSF member interests arising from member contributions and earnings, whereas discretionary trust interests arose only upon the trustee exercising its discretion to distribute income or capital;
- the interests were characterised at different points in time, with SMSF member interests accruing over time, compared with discretionary trust interests that crystallised only upon the exercise of the trustee’s discretion;
- SMSF member interests were governed by the detailed statutory framework under the Superannuation Industry (Supervision) Act 1993(Cth), unlike discretionary trust interests; and
- the proportional interests were not identical, with the members holding 48:52 interests in the Fund compared with 50:50 distributions from the Trust.
Accordingly, the Tribunal concluded that s 20(2)(b) of the LTA did not apply.
Although the Tribunal ultimately held that the interests were not ‘the same’, the reasoning leaves unresolved whether a different conclusion may have been reached had the members’ proportional interests in the SMSF mirrored the beneficiaries’ effective interests in the discretionary trust during the relevant period. Accordingly, while the decision provides welcome guidance, it may not represent the final word on the operation of s 20(2)(b).
Conclusion
The decision provides welcome guidance on the meaning of ‘the interests of the beneficiaries’ in s 20(2)(b) of the LTA. In particular, it confirms that the comparison is directed to the beneficiaries’ interests themselves, rather than merely the identity of the beneficiaries.
However, the decision should not be read as establishing a blanket proposition that land held by an SMSF can never be aggregated with land held by a discretionary trust. The Tribunal relied on both the qualitative differences between the interests and the fact that the members’ proportional interests in the Fund (48:52) differed from the beneficiaries’ effective interests in the Trust (50:50).
Accordingly, the decision leaves open the possibility that a different conclusion may be reached where the beneficiaries’ interests more closely align than they did in Ackinclose. SMSF trustees and their advisers should therefore be cautious about assuming that s 20(2)(b) of the LTA will never apply merely because one of the relevant trusts is an SMSF.
Related articles:
- Proposed changes to the taxation of discretionary trusts from 1 July 2028
- Why should you order trusts from DBA Lawyers?
- Family trust elections – one choice, lasting consequences – Part 1
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By Cassandra Hurley, Lawyer ([email protected]) and William Fettes, Director ([email protected]), DBA Lawyers.
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This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.
DBA LAWYERS
1 September 2026
