Tax & ATO News Australia

Abolition of transfer duty on business assets delayed - again!

The Queensland State Government has yet again deferred the abolition of duty on core (non-real estate) business assets. 

On 13 January 2012, Deputy Premier and Treasurer Andrew Fraser announced the further deferral as part of the Mid-Year Fiscal and Economic Review for 2011-2012. 
Each state government was required to abolish certain state taxes including duties as part of the trade-off for the introduction of the GST.  The state governments committed to abolishing most duties as part of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations
The abolition of duty in Queensland on core business assets was first announced as part of the 2006-2007 budget measures and was originally scheduled to be abolished as to 50% on 1 July 2010 and the remaining 50% on 1 July 2011 – no abolition of the duty occurred on either date and the abolition was later delayed to 1 July 2012 and then further delayed to 1 July 2013.  This time, the Government has not committed to a date and has simply stated in the recently published Mid Year Review that it will be “deferred until the Budget can accommodate the abolition”. 
The significant deterioration of key performing revenue sources for the Government such as transfer duty and GST were blamed as the reasons for the further delay.  According to the Treasurer the Government’s revenue forecasts for transfer duty are down by $1.148 billion and GST down by $544 million. 
Duty on business assets other than land will no longer apply in NSW from 1 July 2012.

Posted in: Tax & ATO News Australia at 02 February 12

Ron Pattenden - the full story

As promised, here is a full copy of the article published by The Australian on Saturday 14 January 2012.

Posted in: Tax & ATO News Australia at 01 February 12

A taxpayer's fight to clear his name with the ATO

After many years of fighting the Australian Taxation Office’s allegations of taxes owing and being served with more than one Deportation Prohibition Order by the ATO, Ron Pattenden’s ordeal at the hands of the ATO is still not over.  Despite the fact that we continue to defeat the ATO on Mr Pattenden’s behalf, the ATO seems determined to fight to the bitter end.  Most recently, they have gone all the way back to 2001.  Mr Pattenden will, of course, fight the ATO and clear his name. 

His story was published in The Australian last Saturday.  You can read the beginning of his story here  The full story is available to subscribers of The Australian, however, I will be posting a copy of it here in the next week or so.

Posted in: Tax & ATO News Australia at 17 January 12

ATO loses 3 major cases in 2011

Despite propaganda from the Acting Commissioner of Taxation to the contrary, the Australian Taxation Office copped a battering in a number of cases towards the end of 2011.

The ATO lost in three major tax cases last year – Commissioner of Taxation v Clark[2011] HCATrans 236and The Commissioner of Taxation of the Commonwealth of Australia v Multiflex Pty Ltd[2011] HCATrans 344,which both went to the High Court - and Crown Insurance Services Limited and Commissioner of Taxation[2011] AATA 847, which SMH Tax Lawyers ran on behalf of an offshore insurance company.

All three cases involved the ATO following very narrow, technical arguments and subsequently losing.

In Clark, the ATO tried to overturn a 1990 High Court decision in relation to whether changes to a trust create a new trust estate.  In Crown Insurance, the ATO went even further and tried to overturn a 1932 High Court decision.

The ATO’s strange interpretation of its model litigant obligations was obvious in the Multiflex case.  Multiflex was one of a number of large businesses where the ATO was refusing to refund the Goods and Services Tax owing to the taxpayer, notwithstanding, that this was money the ATO was required by legislation to refund – no different to an income tax refund.

While the ATO was deciding whether to challenge the GST refund, it felt that the money was better in the government’s coffers, rather than with the taxpayers.  At each level of appeal, the Courts held that the ATO was wrong and had to repay the money, but it was not until a hearing before the High Court of Australia, that the ATO finally conceded it had to pay the money back.  The financial distress which was caused to the taxpayers in the meantime was, no doubt, considerable.

Unfortunately, the ATO has a history of using litigation in tax disputes to try and force an outcome.  Although the ATO has unlimited resources and the onus of proof on its side, occasionally taxpayers are prepared to fight for their rights through the courts.

An article in this Saturday’s edition of The Australian newspaper will feature one such taxpayer, who is a client of ours. Check it out if you get a chance.

Posted in: Tax & ATO News Australia at 13 January 12

Hi Ben, The 1938 High Court decision (not 1932, sorry) referred to is Tariff Reinsurance Limited v Commissioner of Taxes (Vic) (1938) 59 CLR 194. Feel free to email me directly to discuss further. Where are you studying? Kind regards David Hughes
Comment by David Hughes lodged 05 March 12

I'm doing a tax law case analysis on the Crown case for university and was wondering which case you were referring to when you say: "In Crown Insurance, the ATO went even further and tried to overturn a 1932 High Court decision." I look forward to hearing from you shortly and would appreciate any wisdom you could impart regarding this case. Thank you very much for your time. Regards, Ben Singleton
Comment by Ben Singleton lodged 26 April 12

Merry Christmas from the ATO

Lawyers would have recently received the Queensland Law Society's Newsflash outlining the ATO’s current data matching project in relation to the profession.

A similar exercise proved very successful for the ATO when undertaken through the NSW Law Society in 2003/4, however, the outcome was not so favourable for some lawyers and barristers. This followed a particularly high profile case where a well known Sydney silk declared himself bankrupt after 45 years of not lodging tax returns.

If you would like to know more about how the ATO’s data matching project might affect you, David Hughes from SMH Lawyers is one of only four Accredited Specialists in Taxation Law in Queensland.

If you happen to be unfortunate enough to receive a call from the ATO or you would like to know whether or not you should worry, give David a call on 07 5552 6666.

Posted in: Tax & ATO News Australia at 19 December 11


Tax & ATO News Australia

Author: David Hughes

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