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On 25 May 2007, the High Court granted the taxpayer leave to appeal from the decision of the New South Wales Court of Appeal in Bluebottle UK Limited & Ors v FCT.

The case concerned the issue of whether an Australian company (Virgin Blue) had an obligation to retain and pay to the Commissioner tax on account of 2 non-resident shareholders of Virgin Blue to whom a dividend (declared in the preceding month) was payable. Prior to payment of the dividend, but after service on Virgin Blue of a notice under s 255 ITAA 1936 requiring payment of the tax, the 2 non-resident shareholders had assigned, for value, their rights to the future dividend to another non-resident company, Bluebottle UK Limited.

The Court of Appeal held that Virgin Blue was obliged to comply with the s 255 notice  - see 2006 TAXVINE No 49 (11) (20 December 2006) - upholding the Commissioner's appeal from the decision of Gzell J - see 2006 TAXVINE No 27 (6) (21 July 2006) - who had held that it did not have any such obligation.

For a copy of the transcript of the special leave proceedings in the High Court, go here

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