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ATO 1 – Banks & Lenders 0


The recent decision of the Full Court of the Federal Court in FCT v Park confirmed the Commissioner of Taxation’s power, under s 260-5 of Sch 1 to the Taxation Administration Act 1953 (Cth) (sometimes known as the Commissioner’s garnishee power), to demand that a purchaser of real property (purchasing from a vendor owing tax and related debts to the Commissioner) pay the Commissioner an amount equal to the tax owed by the vendor. This was despite the sale proceeds being insufficient to discharge the second of two registered mortgages over the property.

This article considers the decision in detail, and concludes that the practical consequences of the decision will be a likely increase in the number of such notices issued by the Commissioner, and an incentive for lenders to take a harder position on their rights than previously.

Author profile

Michael Bennett CTA
Michael is a barrister practicing from 13 Wentworth Chambers in Sydney. He practices in Tax planning (including Superannuation, Estate Planning and Structuring), Federal and State Tax litigation, Commercial litigation and Bankruptcy and Insolvency litigation. From 2006 to 2011, before coming to the Bar, Michael was a solicitor in two boutique SME tax and commercial practices. He was a Judges Associate before that. Michael lectures in tax law in the UNSW Masters of Laws Program. Michael frequently writes for the Tax Institute or other professional bodies and gives presentations for various bodies on the areas in which he practices. - Current at 27 November 2019
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