Ahmad v Commissioner for Act Revenue (Administrative Review)

[2018] ACAT 33

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

AHMAD v COMMISSIONER FOR ACT REVENUE (Administrative Review) [2018] ACAT 33

AT 74/2017

Catchwords:             ADMINISTRATIVE REVIEW – land rent – whether the applicant was eligible for a discount on land rent charges – whether the applicant’s gross income exceeded the income threshold amount

Legislation cited:      Income Tax Assessment Act 1997 ss 11, 12, 13, 14, 15

Land Rent Act 2008 ss 9A, 12, 33, 34

Taxation Administration Act 1999 s 107A

Subordinate

Legislation cited:     Land Rent (Total income of lessee—pre-1 October 2013 leases) Determination 2015 (No 1) DI 2015-224

Tribunal:                  Senior Member G Lunney SC

Date of Orders:  22 March 2018

Date of Reasons for Decision:         22 March 2018

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          AT 74/2017

BETWEEN:

BASHIR AHMAD

Applicant

AND:

COMMISSIONER FOR ACT REVENUE

Respondent

TRIBUNAL:Senior Member G Lunney SC

DATE:22 March 2018

ORDER

The Tribunal orders that:

1.The decision under review is confirmed.

………………………………..

Senior Member G Lunney SC

REASONS FOR DECISION

1.This was an application for review of a decision made by the respondent on 7 November 2017. The decision concerned the applicant’s eligibility for discounted land rent charges for the period 1 October 2016 to 30 September 2017.

2.The applicant had applied for discount on 30 September 2016, and that application was declined by decision of 12 May 2017. He objected and the original decision was confirmed in the internal review decision on November 2017. The ground for ineligibility was that his gross income for the 12 month period ending 30 June 2016 exceeded the income threshold amount.

3.In his application for review, the applicant sought the following orders:

1.     My gross income should be calculated under the legislation existed at the time of contract.

2.     Decision about inclusion of Family Tax Benefit be made under the definition of gross income existed at the time of the contract.

3.     All interest charged on unpaid Land Rent be taken off from the total amount payable.

4.     I should be given sufficient time to pay off the debt.

5.     I should be compensated for my time and suffering.

Jurisdiction

4.Section 33 of the Land Rent Act 2008 (LRA) provides that a decision under section 12 of the Act; that is a decision on an application for discount, is a decision that may be objected to. Section 34 provides that a determination by the Commissioner of the objection is a reviewable decision for the purposes of section 107A of the Taxation Administration Act 1999. There is therefore jurisdiction to review the decision.

Factual background

5.In June 2012 the applicant signed a contract for the purchase of a residential block in the suburb of Coombs which later became identified as Block 5 Section 30 Coombs. The LRA related to the transaction and the land rent scheme established by the legislation allows lessees to rent land annually from the ACT Government instead of purchasing land outright.

6.Major amendments were made to the LRA by the Land Rent Amendment Act 2013 with effect from 1 October 2013. The Explanatory Statement for the legislation referred to some misuse of the scheme and provided from 1 October 2013 for limitation of availability to the scheme to low and middle income earners who were eligible on entry to the 2% discount rate. It stated that the amendments to the scheme would only affect those lessees that enter the scheme on or after 1 October 2013. The applicant had already entered the scheme by that time.

7.Significantly, the amending Act introduced a new section 9A which provides that the Minister may by disallowable instrument determine how the total income of a lessee is determined.

8.Pursuant to that section, the Minister made Disallowable Instrument DI 2015-224 which took effect from 1 July 2015. It applied to a land rent lease first granted under a contract entered into before 1 October 2013. It included in the total income of a lessee “income from all sources, for example income that is exempt income under the Income Tax Assessment Act 1997 (Cth).”

9.In February 2014, the applicant applied for discounted land rent in respect of the property and this application was approved. On 8 May 2014 the Crown Lease was registered for the property with the ACT Land Titles Office.

10.On 30 September 2015, the applicant applied for discounted land rent which application was approved.

11.Then on 30 September 2016, the applicant applied for discounted land rent for another 12 month period. The financial material that he sent in support of his application showed that he had received a Family Tax Benefit in the financial year 2015/16 which when added to his other income resulted in his total income exceeding the discount threshold. By letter of 12 May 2017, the applicant was advised that he was not eligible for discounted rent.

Grounds of application and consideration

12.The first ground for the application was that the Family Tax Benefit should not have been included in his total income. This ground was related to his second ground that section 9A of the Act did not come into force until 18 September 2017 which was the date of a republication of the Act which included section 9A and which in its printed version indicated that the republication was effective from 18 September 2017.

13.These grounds cannot be accepted. The relevant period of income for assessment of eligibility for the period 1 October 2016 to 30 September 2017 was the financial year 2015/2016. The Land Rent Amendment Act 2013 amendment adding section 9A came into effect on 1 October 2013. Pursuant to that section the Minister made the Land Rent (Total income of lessee – pre 1 October 2013 leases) Determination 2015 (No 1), Disallowable instrument DI2015-224 and which commenced on 1 July 2015. This Determination applied to the applicant since his land rent contract predated 1 October 2013.

14.That Determination in clause 4 included in the lessee’s total income exempt income under the Commonwealth Income Tax Assessment Act 1997. Section 11-15 of that Act lists Family Tax Benefit as exempt income, and is therefore to be included in a lessee’s total income in assessing eligibility for discount.

15.Correspondence from Centrelink to the applicant showing the amount of Family Tax Benefit he was paid for the year 2015-16 commences at page 27 of the T Documents. It is this amount which when added to his other income which carries him over the eligibility threshold.

16.The applicant appears to have unfortunately been mistaken in his understanding of some reasonably complex legislation in its application to his circumstances.

17.In his application for review the applicant sought a number of orders. The jurisdiction of the Tribunal is restricted by the legislation to review of a decision which did not deal with issues of interest or other issues referred to by the applicant in his orders sought, but of eligibility for a discounted rate of payment.

18.The order of the Tribunal is that the decision under review is confirmed.

………………………………..

Senior Member G Lunney SC

HEARING DETAILS

FILE NUMBER:	AT 74/2017
PARTIES, APPLICANT:	Bashir Ahmad
PARTIES, RESPONDENT:	Commissioner for ACT Revenue
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	Ms Musgrove
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	ACT Government Solicitor
TRIBUNAL MEMBERS:	Senior Member G Lunney SC
DATES OF HEARING:	14 March 2018