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Part IVA and loss of privilege


The Commonwealth Treasury has recently held consultations concerning the Australian Taxation Office's discretion to withdraw the administrative concession for tax advice provided by accountants. One matter commonly overlooked in this consultation process was the vulnerability of claims for client legal privilege in respect of legal advice provided by legal practitioners to be abrogated in circumstances where Pt IVA of the Income Tax Assessment Act 1936 may apply.

This article examines the circumstances in which client legal privilege may be abrogated by reason of the potential application of Pt IVA. The author suggests that the ATO should take appropriate steps to clarify the position and provide certainty to taxpayers. In the interim, practitioners should consider the potential implications of these issues in respect of both tax and non-tax advice and take prudent steps to preserve any right that their clients may have to claim client legal privilege.

Author profile:

Christopher Peadon FTI
Chris, FTI, is a barrister at the New South Wales Bar. He has 15 years experience in tax, including five at the Bar. He regularly advises and appears for taxpayers and the Commissioner. Many of his matters involve issues concerning the taxation of direct and indirect interests in land, including Div 855 (TARP) and landholder duty. Current at 07 March 2016 Click here to expand/collapse more articles by Chris PEADON.
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