|Date of judgement||20 June 2014|
|Judge(s)||NS Isenberg, Senior Member|
|Court or Tribunal||NSW Civil and Administrative Tribunal – Administrative and Equal Opportunity Division|
Land Tax; special trust; remission of market and premium interest s72 Land Tax Management Act 1956 - ss 21, 22, 25 Taxation Administration Act 1996
The Taxpayer sought a review of the Chief Commissioner’s decision to refuse to remit interest imposed in respect of land tax assessments for the 2009 to 2013 tax years. Both the market and premium interest rates were imposed on the basis that the taxpayer had committed a tax default by failing to lodge correct land tax returns disclosing its interests as trustee of a special trust.
The Tribunal found that the taxpayer had failed to lodge complete land tax returns, which constituted tax defaults; that the Chief Commissioner had not contributed to the tax defaults, that the Taxpayer failed to take reasonable care to comply with the relevant taxation laws, and upheld the Chief Commissioner’s refusal to remit market and premium interest.
In May 2007, the Taxpayer company was registered, the Laviva Trust was settled, duty was paid, and the Taxpayer was appointed trustee of the Trust. Mr Hassan was the sole director, company secretary and sole shareholder in relation to the relevant tax years.
In September 2008, the Taxpayer purchased a property at Merrylands, with the purchaser described in the contract as “Laviva Nominees Pty Ltd”.
In about May 2012, the Taxpayer purchased a second property at Maroubra, as trustee, with MilenaTrajilovic, but the trust was not named or described in the purchase contract.
In April 2009, the Taxpayer lodged an initial land tax return for the 2009 land tax year, disclosing its interest in the Merrylands property.
In December 2009, the Chief Commissioner sent the Taxpayer a letter along with a 2009 Land Tax guide, as well as details of the taxpayer’s ownership of the Merrylands property disclosed in the Taxpayer’s return. The letter advised the Taxpayer to contact the NSW Office of State Revenue (“OSR”) if any of the details were incorrect. The Taxpayer did not respond to the letter and so in February 2010, was issued with a land tax assessment notice for 2009 and 2010. Assessments for 2011, 2012 and 2013 were subsequently made and notices issued for each tax year. In all cases, tax was calculated on the basis that the Taxpayer was entitled to the tax-free threshold.
In April 2013, OSR received an initial land tax return for the Maroubra property stating that the owners were Milena Trajilovic and the Taxpayer (Laviva Nominees Pty Ltd). The return was incomplete and did not disclose the existence or details of the trust.
In August 2013 OSR requested that the Taxpayer provide additional information about the ownership of the Maroubra property. The document was returned, but questions about whether a trust had an interest in the land were not answered. Consequently, in September 2013, the taxpayer was re-assessed as a special trust for the 2009 to 2103 tax years, and both the market and premium rates of interest were imposed. The Chief Commissioner contended that the Taxpayer had committed tax defaults by failing to furnish complete land tax returns for the relevant tax years.
The Chief Commissioner subsequently refused an application by the Taxpayer for remission of interest because the Taxpayer had not taken reasonable care when complying with the relevant taxation laws.
The issues for determination by the tribunal were:
The Tribunal had regard to evidence presented and assertions by Mr Hassan that:
The Tribunal noted that there was no obligation on the Chief Commissioner to justify the assessment, and the fact that the deed settling the Trust was stamped by OSR (before it acquired any land) did not impose any relevant obligation on the Chief Commissioner.
The Tribunal determined that:
The Tribunal confirmed the decision of the Chief Commissioner not to remit market and premium interest.