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Tax Litigation: get the winning team on your side!
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Keith James, Partner - Tax, Garry Sebo, Partner- Tax, Jerome Tse, Senior Associate - Tax, Sally Scott, Partner – Tax Litigation, Gerard Magner, Partner – Tax Litigation, Brooke Byrne, Lawyer – Tax Litigation |
Your client is dissatisfied with an ATO decision. Where can you go, what can you do?
Points to take from our most recent wins
Hall & Wilcox’s Tax Litigation Team continues to lead the way with wins in significant tax cases.
Cakjusic & Ors and the Commissioner of Taxation
The Full Federal Court held that, in the taxpayer’s circumstances, income for section 97 purposes (the present entitlement provision) was a reference to income as defined under the trust deed. The relevance of this decision is that the Court has upheld the proposition that a trust deed can define the term “income”. The Commissioner of Taxation (“the Commissioner”) unsuccessfully applied for special leave to appeal to the High Court. Hall & Wilcox represented the taxpayer.
This case has caused much controversy in the income tax environment. The Commissioner, having exhausted his appeal options, is currently drafting a decision impact statement on the case and it is understood that the Commissioner will be taking an extremely narrow and controversial view of the decision.
Long and the Commissioner of Taxation
In this Administrative Appeals Tribunal decision, Pascoe SM held that, contrary to the Commissioner's longstanding view, a director of a company (in its own capacity or as trustee of a trust) can dismiss himself or herself as an employee of that company for the purposes of the bona fide redundancy provisions. In this case, the redundancy was effectively forced on the director / employee because the business lost its one and only contract.
The Administrative Appeals Tribunal did note that this was not a blanket decision affecting all directors. Instead, a careful examination of the facts would be required. This has been emphasised in the Commissioner’s decision impact statement on the case.
Luxury Boat Exemptions
The Federal Court held that the taxpayer’s luxury motor yacht was sales tax exempt as it was a “demonstrator boat” and qualified for exemption under item 59(1) in Schedule 1 to the Sales Tax (Exemptions and Classifications) Act 1992.
As a result, the Commissioner’s notice of assessment requiring the taxpayer to pay sales tax of $300,148 and a penalty of $90,125 was set aside.
Although this was one of the last sales tax cases, it may have some relevance for similar GST matters. Furthermore, it shows the value of appealing the Commissioner’s decisions in circumstances where a taxpayer is dissatisfied with an assessment.
Why we have the winning team
The Hall & Wilcox approach to tax litigation is unique. We couple some of the country’s best tax lawyers with highly experienced litigation lawyers to form a formidable team.
We’ve been running tax litigation for many years and as a result we understand how the ATO “thinks”. We employ strategies guided by our experience and knowledge of the ATO and its intricacies. We draw on this knowledge to advise our clients. We equip our clients with practical advice which enables them to make well informed decisions about their litigation. Part of our success is knowing when to fight and when to compromise.
How can we help?
We can assist you and your clients in the following ways:
- Drafting or reviewing draft Notices of Objection;
- Reviewing Decisions on Objection and advising on options for review and prospects of success;
- Appealing decisions in all relevant jurisdictions;
- Applying for Test Case Funding;
- Advising in relation to tax debt recovery proceedings.
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