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Garnishee notices: FCT v Park

Published on 01 Apr 13 by "THE TAX SPECIALIST" JOURNAL ARTICLE

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.

Author profile

Dr Philip Bender ATI
Philip is a barrister at the Victorian Bar practising in federal and state taxation and superannuation. He acts for both taxpayers and revenue authorities and has appeared in a number of leading cases in these fields. Philip is also the author of Bender’s Australian Stamp Duties, a book published by The Tax Institute dealing with stamp duty in all Australian jurisdictions. - Current at 26 June 2019
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