Sub-sales - land development; discretion to issue assessments
Background
The matter considered 35 separate transactions assessed for duty under the sub-sale provisions in Part 4A of Chapter 2 of the Duties Act on the basis of land development. The taxpayers accepted that the sub-sale provisions were applicable, but contended that the Tribunal should exercise the discretion in s8 of the Taxation Administration Act 1997 (TAA) not to assess their tax liability because there was no profit element to the transfers between the related parties.
Decision
On 18 July 2019, the Tribunal decided in favour of the Commissioner. It confirmed that s8 of the TAA included the discretion not to make an assessment of a tax liability. However, the Tribunal was not vested with that discretion in a review proceeding under Part 10 of the TAA. In any event, the Tribunal would have declined to exercise it, even if the absence of profit and commerciality was accepted as a relevant consideration, due to the countervailing considerations, namely [122-123]:
“…in this case, there were 35 transactions over a two and a half year period. The applicants or their conveyancer should have been put on notice by the Form 6A and the explanatory notes to that document. Despite this, they entered into a further 34 transactions after the lodgement of the first of those forms.
Moreover, there was no voluntary disclosure of the error by the applicants to the Commissioner. Rather, the issue was discovered in the course of an investigation by the Commissioner.”
