Published on 01 Nov 12
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
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.
Michael is a Barrister with Seven Wentworth Chambers.
Current at 01 July 2011
Click here to expand/collapse more articles by Michael Bennett.