A billionaire who bought Tasmania’s Woolnorth dairy for A$280 million in 2016 has won a tax reversal: a full court overturned the case that had left his companies facing A$23.4 million including penalties and interest

A Full Court in Tasmania has overturned a multi-million-dollar tax assessment against companies linked to billionaire businessman Xianfeng Lu. The decision cancels a disputed A$23.4 million stamp duty bill, including accumulated penalties and interest. The ruling is a major legal win for Moon Lake Investments and other companies linked to Mr Lu. The dispute arose from the 2016 purchase of the large Woolnorth dairy estate in north-west Tasmania. Moon Lake Investments Pty Ltd bought the property for A$280 million.Background on the 2016 Woolnorth acquisitionXianfeng Lu bought the historic Woolnorth property in March 2016, adding the large farming business to his wider portfolio. The deal involved buying the assets of the Van Diemen's Land Company, one of Australia's largest and oldest dairy farming operations. When the deal was first settled in 2016, Van Dairy Limited paid A$8.2 million in standard stamp duty. However, tax authorities later argued that additional transactions and share transfers made before the deal was finalised meant more tax had to be paid. By July 2021, the Tasmanian State Revenue Office had informed lawyers representing the companies that further payments were due. The authority claimed that Ningbo Moon Lake Investment Company and Van Dairy Holdings Limited each owed separate amounts of stamp duty, along with penalty tax and interest. These charges pushed the total demand above A$20 million.Previous legal rulings and court appealsThe tax dispute moved through the courts over several years as the companies challenged the penalty assessments and the way the underlying tax amounts had been calculated. In November 2024, Acting Justice Shane Marshall rejected appeals from both sides during the first stage of the court case. This left the companies facing the large financial liability. Unhappy with the outcome, lawyers for Mr Lu's companies took the case to a Full Court for further review. On Wednesday, the Full Court delivered its final decision. The panel included Chief Justice Chris Shanahan, Justice Michael Brett, and Justice Stephen Estcourt. The judges ruled fully in favour of Mr Lu's investment companies. They also formally rejected a cross-appeal filed by the State Revenue Office.Impact on agricultural holdings and local operationsThe successful appeal removes a major financial burden that had hung over the companies managing the property in north-west Tasmania for years. Since the 2016 purchase, the large Woolnorth estate has gone through major changes in how it operates. Parts of the farming land were later sold to other agricultural groups, including sections bought by the TRT Pastoral Group in 2021. Sales involving the remaining land, livestock, machinery, and historical records linked to the Van Diemen's Land Company name have also continued. These sales have been listed through agency networks such as Nutrien Harcourts. Looking back on his time managing the property through various business and ownership changes, Mr Lu said in earlier public comments reported by Tasmanian Country that it had been an "honour to be the owner and custodian of one of Australia's most important historic agricultural properties." The latest court ruling provides legal certainty for the complex company transactions behind the multi-million-dollar agricultural purchase made nearly a decade ago. It also brings one of the most closely watched tax disputes in modern Tasmanian business history to a close.You use AI every day. Now get your AI Quotient. Take the AIQ test.