Tax administration 2013

Garnishee notices: FCT v Park

Source: The Tax Specialist Journal Article

Published Date: 1 Apr 2013


Where certain types of tax debts and related amounts are owed by a taxpayer, the Commissioner is empowered, under Div 260 of Sch 1 to the Taxation Administration Act 1953, to send a written notice to a third party who owes money to the taxpayer requiring that third party to pay the Commissioner the lesser of the tax debt and the available money. The recent decision of the Full Court of the Federal Court in FCT v Park highlights just how powerful this “garnishee” notice procedure is, with the potential to disrupt commercial transactions. The case highlights the need for even secured creditors to be wary when the Commissioner employs the garnishee notice procedure.

This article examines the reasoning in the case and the implications for mortgagees and taxpayers when the Commissioner issues a garnishee notice to the purchaser of a property.

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Tax administration 2013

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