Harding v Commissioner for Act Revenue (Administrative Review)
[2016] ACAT 8
•11 February 2016
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
HARDING v COMMISSIONER FOR ACT REVENUE (Administrative Review) [2016] ACAT 8
AT 43 of 2015 & AT 44 of 2015
Catchwords: ADMINISTRATIVE REVIEW – land tax – interest and penalty tax – taxpayer did not exercise reasonable care and did not have reasonable excuse – taxpayer has obligation to notify Commissioner – whether applicants were ‘new owners’ before mortgagee registered transfer of property
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 68
Land Tax Act 2004 ss14, 19A, 36, 38, 39, dictionary ‘owner of a parcel of land’
Tax Administration Act 1999 ss 31, 32, 33, 37, 100, 101, 105, 107A, 108B, schedule 1, part 1.1, part 1.2
Tribunal: Senior Member W Corby
Date of Orders: 11 February 2016
Date of Reasons for Decision: 11 February 2016
ACT CIVIL & ADMINISTRATIVE TRIBUNAL AT 43 of 2015 &
AT 44 of 2015
BETWEEN:
PETER HARDING
Applicant AT15/43
CLAIRE HARDING
Applicant AT15/44
AND:
COMMISSIONER FOR ACT REVENUE
Respondent
TRIBUNAL: Senior Member W Corby
DATE: 11 February 2016
ORDER
The Tribunal Orders:
1.That the reviewable decision dated 14 May 2015 in relation to each of the applicants is confirmed.
………………………………..
President L Crebbin
for and on behalf of
Senior Member W Corby
REASONS FOR DECISION
Peter Harding and Claire Harding (the ‘applicants’) each applied to the ACT Civil and Administrative Tribunal (‘ACAT’) for review of the Commissioner for ACT Revenue’s (the ‘respondent’) decision dated 14 May 2015 to disallow their objection to the imposition of penalty tax and interest in respect of a land tax assessment dated 23 April 2014 (the ‘reviewable decision’).
In these reasons for decision, when referring to the individual member making the decision the term ‘Tribunal’ will be used.
For the reasons set out below the Tribunal confirms the reviewable decision.
The Hearing
A hearing was held on 11 December 2015. The applicants appeared in person. They were not represented. At the commencement of the hearing the applicants advised the Tribunal that Peter Harding would, for the most part, make submissions on behalf of the applicants. Both Peter Harding and Claire Harding gave evidence during the hearing about specific matters. The applicants did not call any witnesses.
Mr Buckland appeared as counsel for the respondent instructed by Ms Hutchinson from the ACT Government Solicitor’s Office.
Mr Duermeier from the respondent’s office attended throughout the hearing to provide instructions.
Mr Jukka Siiteri, Assistant Manager of Accounts Management Team, Property, Payroll and Debt Section of the respondent’s office, attended and gave evidence on behalf of the respondent. Mr Siiteri prepared a written statement dated 5 November 2015 which was tendered at the hearing (Exhibit R1). Mr Siiteri answered questions put by Mr Harding, on behalf of the applicants, and the Tribunal. Subsequent to giving oral evidence, and at the request of the Tribunal, Mr Siiteri arranged for a further, electronic search of the respondent’s records in order to determine whether the respondent had any record of having received email correspondence from the applicants, from an alternative email address provided to him by the applicants at the hearing. No email was located. The results of that further search were then provided by email to the Tribunal prior to the end of the hearing. That email is Exhibit R4.
At the conclusion of the hearing the Tribunal reserved its decision.
Information considered by the Tribunal
The Tribunal has taken the following information into consideration:
(a)the written submissions filed in ACAT by the parties;
(b)the oral submissions made and evidence given or tendered as Exhibits, by or on behalf of the parties at the hearing;
(c)the documents filed by the respondent being those documents held by the respondent which are relevant to the reviewable decisions:
i. the Tribunal Documents filed in ACAT by the respondent on 20 July 2015 – these will be referred to as ‘T Docs’ and will be identified by the page number attributed to them by the respondent (e.g. T Doc 1); and
ii. the Supplementary Tribunal Documents filed in ACAT by the respondent on 11 September 2015 – these will be referred to as ‘ST Docs’ and will be identified by the page number attributed to them by the respondent (e.g. ST Doc 1);
(d)the written statement tendered (Exhibit R1) and oral evidence given by Mr Siiteri; and the further email information provided by Mr Siiteri on behalf of the respondent;
(e)the relevant legislative provisions referred to in these reasons for decision are set out in Schedule 1 which is attached;
(f)the ACAT and ACT Supreme Court decisions that the Tribunal was referred to by the parties. The Tribunal has considered these decisions. In reaching its decision the Tribunal has concluded that the operation of the relevant legislative provisions when applied to the particular facts, supports the conclusion the Tribunal has reached. In the Tribunal’s view this conclusion is consistent with the approach taken in the decisions the Tribunal was referred to by the paties.
Background
The applicants are the registered proprietors of a parcel of land being Unit 1, Block 4, Section 21 in Forrest, ACT (the ‘property’ or ‘Forrest property’).
The applicants purchased the property in 2010. They took possession of the property from 10 September 2010 when the settlement occurred. The applicants’ bank, the National Australia Bank (‘NAB’ or ‘the mortgagee’), held a mortgage over the property. The mortgagee did not formally register the transfer document and the applicants’ interest in the property, as joint tenants, until 6 April 2011 (Exhibit R6[1]). In the transfer document the applicants’ postal address, after transfer, was a Palmerston address where the applicants, at that time, resided (the ‘Palmerston address’).
[1] Exhibit R6 is a copy of the transfer document lodged on 6 April 2011 by NAB at pages 38 -39 of the T Docs.
The first rates notice that the applicants received in relation to the property was dated 17 May 2011.[2] It was sent to and received by the applicants at the Palmerston address. The rates amount was payable by 15 June 2011.
[2] Exhibit A1 – Fourth Installment Notices for Rates 2010-11 in relation to the property with hand written notes in pen made by Peter Harding
The applicants say that there was no additional information about land tax liability included with the 17 May 2011 rates notice sent by the respondent to the applicants.
After receiving the 17 May 2011 rates notice[3] Mr Harding said that he rang the respondent’s office:
(a)to pay the amount of the notice;
(b)to inform the respondent that the details of the street address of the property that appeared in the rates notice were incorrect and should be amended from 1/54 Bougainville St, to 1/50 Bougainville St;
(c)to confirm that no other amount for rates was outstanding. Mr Harding gave evidence that he was concerned because of the delay between settlement on 10 September 2010 and the date of this rates notice. This was the only rates notice for the property that the applicants had received. Mr Harding said he wanted to confirm that there was no additional rates amount owing, and that no penalty tax or interest were payable; and
(d)after seeing the note about residential land tax liability on page 2 of the rates notice, to inform the respondent that the property was tenanted.
[3] Exhibit A1
Mr Harding said that in the telephone conversation that he had with someone from the respondent’s office:
(a)he paid the rates amount and recorded the receipt number on his copy of the 17 May 2011 rates notice;[4]
(b)he provided the correct address details for the property;
(c)he specifically confirmed that no other rates, penalty or interest amount were payable. He said the person he spoke to confirmed that the rates for the property were now, after his payment, paid up to that date and there were no outstanding amounts owing for rates, penalty tax or interest; and
(d)although Mr Harding advised the person he spoke to that the property was rented, he was advised that this information could only be provided to the respondent in writing. The person that Mr Harding spoke to then provided Mr Harding with an email address which he could use to send that written advice to the respondent. Mr Harding recorded this email address in pen on page 2 of his copy of the 17 May 2011 rates notice[5] as ‘[email protected]’. Mr Harding says that he specifically recalls this conversation because he remembers that he was annoyed at the inconvenience of having to provide this information in writing when he had been able to provide the change of address information by phone.
[4] The number 116616450609 is recorded in pen within the ‘Receipt Details’ box on page 1 of Exhibit A1
[5] Exhibit A1
The Tribunal notes that the unit, block, section and suburb details appearing in the 17 May 2011 rates notice were correct. The Tribunal also notes that in the next, and subsequent, rates notices sent by the respondent[6] to the applicant that the correct street address for the property, as provided by Mr Harding, is recorded. There is no dispute that the applicants have paid all rates notices issued in relation to the property and that no penalty tax or interest was imposed for rates in relation to the period 10 September 2010 to 17 May 2011.
[6] ST Docs 4 -7
Mr Harding gave evidence that at some time after the telephone conversation that he had with the respondent’s office about the 17 May 2011 rates notice, he sent an email to the respondent’s email address that had been provided to him. In the email he advised the respondent that the property was tenanted. Mr Harding did not make a hard copy of the email. Subsequent to sending the email the applicants had an issue with their computer and are not now able to access historical email information and so are unable to provide any confirmation that the email was sent.
Mr Siiteri, who gave evidence at the hearing on behalf of the respondent, confirmed that the email address noted by Mr Harding on the 17 May 2011 rates notice[7] – [email protected] – is the correct and primary address used by the public when communicating with the respondent about land tax.[8]
[7] Exhibit A1
[8] Exhibit R1 – Mr Siiteri’s statement at paragraph 3
Mr Siiteri gave evidence that a search was conducted by the respondent of its records, using information:
(a)provided by the applicants as to several possible email addresses that may have been used by the applicants to send the email to the respondent; and
(b)other information including the applicants’ surname, the addresses of 1/50 and 1/54 Bougainville St, and the suburb name, Forrest, where the property is located.
No email from the applicants advising that the property was tenanted was located.
Mr Harding gave evidence that he sent the email. Mr Harding says that he did not receive any response or acknowledgement from the respondent that it had received the email that he sent. Mr Harding did not make any further enquiries of the respondent about the email. No land tax notices were issued by the respondent to the applicants in relation to the property until the notice imposing land tax, interest and penalty tax dated 23 April 2014.[9]
[9] T Docs 66-70
Mrs Harding gave evidence that she had left it to Mr Harding to advise the respondent about the property being tenanted. She had assumed Mr Harding had sent the email to the respondent and so assumed notice had been given. Mrs Harding did not herself see the email or take any action to advise the respondent that the property was tenanted. Mrs Harding said that the aplicants were busy people with work and family commitments and, since she assumed that the email had been sent, she did not again turn her mind to the issue of land tax for the property.
Mr Harding did not make a note of and cannot recall the date on which he rang[10] the respondent in relation to the 17 May 2011 rates notice.[11]
[10] being the telephone conversation referred to in paragraph 14 above
[11] Exhibit A1
The respondent’s records show that:
(a)the payment for the 17 May 2011 rates notice of $541 was credited to the applicants on 15 June 2011[12]; and
(b)a memo records that on 23 June 2011, in response to telephone advice by ‘the owner’, the address of the property in the respondent’s records was changed from 1/54 to 1/50 Bougainville St.[13]
[12] ST Doc 1 row 4
[13] ST Doc 2 at Row 1 which is highlighted and the full text of the memo appears in the box at the bottom of the page – dated 23 June 2011 at 11:51
At the hearing the respondent advised that in 2011 the only way to make telephone payments with the respondent was via Canberra Connect. Telephone payments could not be made directly with the respondent. This would explain why the payment is recorded as having been made via the Commonwealth Bank even though the applicants advised that in 2011 they only used NAB. The respondent said telephone payments made via Canberra Connect were processed through the Commonwealth Bank.
The respondent submitted that if the payment was made via Canberra Connect then the person with whom the applicant spoke when he made the payment did not work for the respondent and was not able to make the address change or provide the information about written notice in relation to land tax. The respondent submitted that it is likely that Mr Harding had a further telephone conversation with an officer at the respondent’s office – probably on 23 June 2011.[14] It was on that date, apparently, that the address was changed.
[14] ST Doc 2
Mr Harding says that the respondent’s record of the rates payment on 15 June 2011 and address change on 23 June 2011, do not prove that Mr Harding made more than one phone call. He says there may have been a delay between him providing the advice about the address change on 15 June 2011 and the action taken by the respondent to change the address on 23 June 2011. He notes further that, even if the dates are different, there is no doubt that he did discuss the issue of land tax with the respondent’s officer whom he advised about the address change. If the memo made on 23 June 2011 was made when Mr Harding advised of the address change then the memo clearly fails to record the further query that he made about land tax. Had that information been recorded then the respondent would, or should, have been on notice that the property was tenanted.
Mr Harding said that to the best of his recollection he did not have more than one telephone conversation. His recollection is that during the one telephone conversation that he had, he paid the rates, changed the address and was provided with information about the need to send an email about land tax. However, Mr Harding conceded that if he did make the payment with Canberra Connect, then he might have had a further telephone conversation with the respondent’s office about these other matters. The real issue from Mr Harding’s point of view is that the respondent’s record of what was discussed in that telephone conversation[15] is inadequate and incomplete. The respondent’s officer failed to record Mr Harding’s telephone advice about the property being tenanted and query about land tax.
[15] ST Doc 2
Mr Harding was not able to say when, exactly, he sent the email to the respondent about land tax. He took no further action after that.
The respondent commenced an investigation[16] into the rental status of the property on or about 8 April 2014. The respondent issued a notice to the applicants pursuant to section 82[17] (the ‘section 82 notice’) of the Taxation Administration Act 1999 (the ‘TA Act’) dated 9 April 2014. Mr Harding, on behalf of the applicants, responded to the section 82 notice on 22 April 2014.[18] The respondent issued an assessment for land tax, including penalty tax and interest, in relation to the property dated 23 April 2014.[19] These matters will be discussed in more detail below.
Legislative framework
[16] T Docs 58-60
[17] T Docs 61-64
[18] T Doc 65
[19] T Docs 66-70
Section 14 of the Land Tax Act 2004 (the ‘LT Act’) requires a relevant person to advise the respondent, in writing, that the a parcel of land is rented. The notice must be made not later than 30 days after the property is rented. A relevant person is either the owner of a parcel of land or their authorised agent.
Although the applicants were not formally registered as the proprietors of the property until their mortgagee (NAB) registered the transfer on 6 April 2011, the settlement occurred on 10 September 2010. It was not disuputed that the applicants took possession of the property on 10 September 2010. There is no dispute that the property was tenanted from 21 September 2010 until 21 October 2013. The applicants were the lessors for the full period of the tenancy.
The LT Act defines ‘owner of a parcel of land’ to include a ‘new owner’ where the purchaser takes possession of the parcel of land and before their interest is registered. Here the applicants were the owners of the property from 10 September 2010.
The applicants gave evidence that although they arranged for an agent to find a tenant, to complete, with the tenant, the tenancy agreement and to deposit[20] the bond amount paid by the tenant, the applicants did not engage an agent to act on their behalf in relation to the ongoing rental of the property. At all times subsequent to the commencement of the tenancy agreement, from 21 September 2010 the applicants received rental payments and managed the tenancy themselves.
[20] with the Office of Rental Bonds
The Tribunal finds that the applicants were the owners of the property and were required to comply with section 14 of the LT Act as from 10 September 2010.
If the owner of a parcel of land fails to comply with section 14 of the LT Act and land tax is imposed on the parcel of land, then interest is payable pursuant to section 19A of the LT Act. The failure to comply with section 14 of the LT Act is deemed to be a tax default for the purpose of part 5.2 of the TA Act which then applies in relation to penalty tax. A reference to interest and unpaid tax in part 5.2 of the TA Act is taken to be a reference to interest in section 19A of the LT Act and unpaid tax is taken to be a reference to the land tax payable.
The Commissioner may, pursuant to section 36 of the LT Act, remit all or part of the interest otherwise payable under section 19A LT Act. A taxpayer may lodge an objection to the Commissioner’s decision about interest, but a taxpayer can not then apply for review by ACAT of the Commissioner’s determination of that objection.[21]
[21] Sections 36, 38(c) and 39(1) of the LT Act
Section 31 of the TA Act deals with the imposition and applicable rate of penalty tax, and section 37 of the TA Act deals with the remission of penalty tax. The operation of these sections will be discussed in more detail below. A taxpayer may lodge an objection to the Commissioner’s decisions about the imposition, rate and or remission of penalty tax under these sections. A taxpayer dissatisfied with the Commissioner’s determination of an objection (the ‘reviewable decision’) may apply to ACAT for review of the Commissioner’s reviewable decisions.[22]
[22] Section 100(1)(b); schedule 1 - part 1.1 and 1.2(d) and (f); 107A and 108 of the TA Act
The taxpayer must provide details of the grounds for their objection. The burden of showing the objection should be sustained rests with the taxpayer.[23] Neither the taxpayer nor the Commissioner is limited, in an application to ACAT for review, to the grounds identified in the objection process.[24] However only reviewable decisions may be the subject of an application to ACAT and the burden of showing that the objection should be sustained remains with the taxpayer.
[23] Section 101 of the TA Act
[24] Section 108B of the TA Act
Notwithstanding that an objection has been lodged, or application to ACAT for review made, the tax payable pursuant to an assessment can be recovered as if no objection or review were pending.[25] The Tribunal notes that the applicants have paid the full amount of the land tax assessment dated 23 April 2014,[26] including interest and penalty tax amounts. The Tribunal accepts the respondent’s submission that this is not a factor relevant to the Tribunal’s consideration of this matter as, if the assessed amount is not paid, interest would continue to accrue on any unpaid land tax and penalty tax amount that remains outstanding as a result of an ACAT order, and the Commissioner is required to pay interest on any amount repayable to the taxpayer as a result of an ACAT order.
Submissions
[25] Section 105 of the TA Act
[26] T Docs 66-70
Prior to 21 September 2010 the applicants owned another property in Turner (the ‘Turner property’) which had been tenanted. That tenancy was managed by agents. Land tax was assessed and paid by the applicants. Mrs Harding signed the relevant section 14 LT Act notice to the respondent in relation the tenancy of the Turner property.[27] At the hearing Mrs Harding said that the agent who managed the property had probably arranged for her to sign that notice. Mrs Harding said that as the applicants are very busy people with many demands on their time, they had relied on their real estate and tax agent to attend to matters relevant to the applicants meeting their tax obligations in relation to tenancy of the Turner property. Mrs Harding said that she did not look at the information about amounts paid by the real estate agents on their behalf for the Turner property and this information was then forwarded to their tax agent. Mrs Harding does not recall having seen any of the copies of the land tax assessments which had been issued, or which were paid on the applicants’ behalf by their agents, for the Turner property.
[27] T Doc 217
Although the applicants relied on their real estate and tax agents to manage the Turner rental property, the applicants chose not to engage an agent to manage the tenancy of the Forrest property after the tenancy commenced on 21 September 2010. The applicants provided no evidence that they took any steps to inform themselves about their land tax obligations when they assumed management of tenancy of the Forrest property from the commencement of the tenancy on 21 September 2010 until it ended on 21 October 2013.
Mr Harding submitted that the period from 10 September 2010 to 6 April 2011 is also relevant to the Tribunal’s consideration of what, if any, penalty tax should be imposed. This is the period from when the settlement on the Forrest property occurred until the applicants’ mortgagee registered the transfer of the property to the applicants. This period, and then the further period until 17 May 2011 when the first rates notice was issued, totals almost eight months. The applicants say that this delay was beyond their control and that during this period no penalty tax should be applied. The applicants submit that they could not have known about this delay and they were first alerted to the delay when they received the first rates notice for the Forrest property dated 17 May 2011.
The Tribunal is not persuaded by this submission. As noted above the LT Act includes in the definition of ‘owner of a parcel of land’ a ‘new owner’ whose interest in the parcel of land has not been registered. A new owner is obliged to comply with section 14 of the LT Act.
This period of time and the delay in registration of the applicants’ interest in the property may have been relevant to a consideration of the applicants’ explanation for their failure to provide a section 14 LT Act notice within 30 days after the property was tenanted on 21 September 2010, if they had provided written notice of the tenancy of the property after receiving the 17 May 2011 rates notice, however, it is not now relevant to the consideration of this matter.
Mr Harding gave evidence that when he received the 17 May 2011 rates notice he was alerted to the land tax implications when he saw the information about land tax on the back (page 2) of the rates notice.[28] Mr Harding made an effort at that time, to make enquiries about what he needed to do. He recorded details of the relevant email address to which he would need to send a written notice. The Tribunal has concluded that it is not satisfied that he in fact sent the necessary written notice, or that a written notice was received by the respondent. This is discussed further below.
[28] Exhibit A1
Mr Harding confirmed that he received no confirmation from the respondent that the respondent had received the email Mr Harding believes he sent in 2011. Although a failure to appreciate the obligation imposed by section 14 of the LT Act does not excuse failure to comply with that obligation. It is relevant that Mr Harding, at the latest after receiving the 17 May 2011 rates notice and having a telephone conversation with the respondent’s office,[29] was aware of the possible land tax obligation and the need to provide written notice to the respondent about the tenancy of the Forrest property. If he did send an email in 2011, then he failed to make any further enquiry in the subsequent years of the tenancy which ended on 21 October 2013, to confirm that the notice had been received by the respondent. Mr Harding failed to make this enquiry even though no land tax assessment for the Forrest property was received by the applicants at any time after 21 September 2010 and before 23 April 2014. As noted above, Mrs Harding said that she relied on Mr Harding to provide this notice on her behalf. Mrs Harding took no action and made no enquiry herself.
Consideration and conclusions
[29] see paragraph 14 above and Exhibit A1
The applicants have also raised a further issue about the validity of the respondent’s assessment of land tax on the property for the period 21 September 2010 until 23 June 2011. The applicants assert that until 23 June 2011, when the correct street address for the property was recorded by the respondent, any assessment for land tax is, in effect, invalid. This issue is first identified in the applicants’ submissions (titled ‘Applicants Response to Respondent (sic) Submission to the ACAT’) filed in ACAT on 20 November 2015 and discussed under the heading ‘Additional Request for Review by the Tribunal’.
The Tribunal finds that it has no jurisdiction to consider this request. Before an application could be made to ACAT for review of this issue, the applicants would need to have lodged an objection to the assessment with the respondent. If an adverse determination of that objection were made by the respondent, then that determination could have been the subject of an application to ACAT. The applicants have at no time, until the submissions filed in this matter on 20 November 2015, denied their liability for the assessment of land tax. No objection was made to the assessment and this is not a matter that the applicants can now raise for review by the Tribunal. The applicants may seek to lodge an out of time objection with the respondent, however that is quite independent of this application for review.
In this application to ACAT the applicants seek review of the respondent’s reviewable decision to impose penalty tax in relation to the land tax payable on the property for the period 21 September 2010 to 21 October 2013.
The applicants say that Mr Harding, on behalf of both applicants, sent an email at some time after receiving the rates notice on 17 May 2011.[30] This email provided written notice to the respondent that the property was tenanted and complied with section 14 of the LT Act. Based on the evidence it is likely that, if an email was sent, it was sent some time on or after 15 or 23 June 2011.
[30] Exhibit A1
The Tribunal is satisfied that the respondent has undertaken a thorough search of its records and has not been able to locate any email from the applicants nor any other written notice from the applicants complying with section 14 of the LT Act about the tenancy of the property.
The Tribunal found Mr Siiteri, who gave evidence about the search efforts made by the respondent, to be a considered and convincing witness. Whilst he conceded that it was possible that there may have been administrative error, that it was possible that information had been deleted, and that he did not feel qualified to respond to certain questions about possible IT issues, the Tribunal is satisfied that the respondent does not have a record of an email sent by Mr Harding about the tenancy of the property.
The Tribunal accepts that Mr Harding has a genuine recollection that he sent an email to the respondent in 2011, however he made no copy of that email and has since experienced computer issues and is therefore unable to locate an electronic record of the email.
The applicants ask the Tribunal to be satisfied that they did meet their obligations under section 14 of the LT Act. The applicants submit that they have provided evidence which the Tribunal should accept that:
(a)Mr Harding had a telephone conversation with someone in the respondent’s office between 17 May and 23 June 2011 in which Mr Harding verbally informed the respondent’s office that the property was tenanted.
(b)Some time soon after the telephone conversation Mr Harding sent an email to the respondent advising that the property was tenanted.
(c)That the respondent’s failure to locate the email does not support the conclusion that it was not sent by Mr Harding and received by the respondent. The applicants say that when viewed in light of the many administrative shortcomings apparent in the respondent’s office, and that the applicants have identified in their submissions to the Tribunal, the Tribunal can be satisfied that, although no copy of the email has been found, it was sent by the applicant.
The Tribunal is not persuaded by the applicants’ submissions.
Mr Harding concedes that he was told in the telephone conversation that he had with the respondent’s office at some time between 17 May and 23 June 2011 that it was necessary for the applicants to advise the respondent in writing that the property was tenanted and that this information could not be provided by telephone. Indeed, Mr Harding recalls that he was annoyed about the need to take this additional action. The Tribunal finds that the information provided to Mr Harding, about the need to provide written notice, is consistent with the obligation imposed by section 14 of the LT Act. The Tribunal is not persuaded that, if this was discussed in a telephone conversation, that the Tribunal should then infer that the respondent knew, or ought to have known, that the property was tenanted and that the applicants had complied with section 14 of the LT Act.
The Tribunal accepts that Mr Harding has a genuine belief and is doing his best when he recalls that he sent an email to the respondent shortly after the telephone conversation that he had with the respondent’s office, at latest on 23 June 2011. However, based on the information available the Tribunal is not satisfied that the email was sent. The applicants did not receive a land tax assessment for the property between 21 September 2010 and 21 October 2013. Mr Harding concedes that he did not receive a response from the respondent to the email he believes he sent in 2011. Neither he nor Mrs Harding took any action to follow up with the respondent about the email when no land tax assessment was received in relation to the property in the subsequent years.
The Tribunal makes no finding as to whether or not the respondent has, in its handling of other documents relevant to the applicants, made mistakes in its administrative processes. Whether or not the respondent’s officer – to whom Mr Harding spoke in 2011 –made a record of Mr Harding’s advice that the property was tenanted or his inquiry about land tax, this did not have amount to compliance by the applicants with section 14 of the LT Act. The Tribunal is satisfied that Mr Harding did speak to someone from the respondent’s office in 2011 and was provided with accurate information about his need to provide a written notice and was provided with the correct email address, which Mr Harding recorded on his copy of the 17 May 2011 rates notice.[31] The Tribunal is not persuaded that this record of the email address should now be interpreted as evidence that the required notice was then sent by Mr Harding, on behalf of the applicants, to that email address in compliance with section 14 of the LT Act. Any failure by the respondent’s officer to record that Mr Harding had made the enquiry, or that the respondent’s officer had provided information about the need to send an email about the tenancy, would not have impacted on the Tribunal’s conclusion about this aspect of the matter.
[31] Exhibit A1
For the reasons set out above the Tribunal finds that the applicants failed to provide notice to the respondent that the Forrest property was tenanted at any time from 21 September 2010, when the property was first tenanted and before receiving the section 82 notice sent by the respondent on 9 April 2014.[32] The applicants did not comply with section 14 of the LT Act. This is a tax default[33] and part 5.2 of the TA Act applies.
[32] T Docs 61-64
[33] Section 19A of the LT Act
The applicants have sought review of the respondent’s decision to impose penalty tax either at all, or at the rate of 50% and/or for the period that penalty tax has been imposed.
Section 31(1) of the TA Act operates so that penalty tax at the rate of 25% is payable when there is a tax default. The penalty tax is 50% if the tax default is caused partly or wholly by a taxpayer’s failure to take reasonable care to fulfil their obligations under a tax law.[34] However, section 31(2) does not apply, and the rate is 25%, if the taxpayer has a reasonable excuse for their failure.[35]
[34] Section 31(2) of the TA Act
[35] Section 31(3) of the TA Act
The Tribunal finds that the applicants did not take reasonable care to fulfill their obligation under section 14 of the LT Act. Mr Harding, on behalf of both applicants, did make enquiries and took certain action in 2011 after receiving the 17 May 2011 rates notice.[36] By May 2011 the applicants had already failed to comply with section 14 of the LT Act. After receiving the 17 May 2011 rates notice[37] the ongoing failure to comply occurred because Mr Harding either failed to send, or failed to take any action to confirm that the respondent had received, the email he believes he sent as the notice required by section 14 of the LT Act.
[36] Exhibit A1
[37] Exhibit A1
Although the Tribunal has found that it is not satisfied that an email was sent by Mr Harding providing notice, even if an email was sent, neither of the applicants took any further action notwithstanding that there was no confirmation of receipt of the email by the respondent and even when for the further years of the tenancy of the property no land tax assessment was received by the applicants.
The excuse provided by the applicants is that the respondent’s systems and processes are inadequate and the email, which they assert was sent and received by the respondent, was likely lost or deleted by the respondent. However this explanation does not excuse the applicants’ ongoing failure to make any further enquiry when they knew that the property was tenanted and subject to land tax liability, but no land tax assessment was received. Had they made further enquiries, and if as they assert an email was sent, then they may have been in a better position to provide proof of this or to explore why it was not received by the respondent and to explain their failure to comply with the time limit in section14 of the LT Act.
At the hearing the applicants said that they are very busy people who have work, home and family commitments and, once they considered that Mr Harding had sent the necessary section 14 LT Act notice by email in 2011, they did not again consider the issue of land tax for the Forrest property. The Tribunal does not accept that this explanation as a reasonable excuse. Many people who have investment properties are in a similar position to the applicants. The applicants had previously owned and paid land tax for their Turner investment property which was tenanted. However, in recognition of the other commitments in their lives, they had engaged a real estate and tax agent to undertake the necessary action to ensure that they met their tax liabilities. Their decision not to do so in relation to the Forrest property meant that they would need to ensure that they undertook this action themselves. They failed to do so.
The Tribunal finds that the applicants failed to take reasonable care to fulfill their obligations under section 14 of the LT Act and have not demonstrated that they had a reasonable excuse for that failure. The Tribunal finds that section 31(2) of the TA Act applies to their situation and the rate of penalty tax that should apply is 50%.
Section 31(6) of the TA Act applies, and no penalty tax is payable, if the taxpayer took reasonable care to comply with a tax law[38], or if the tax default happened solely because of circumstances beyond the taxpayer’s control.[39] For the reasons set out above, the Tribunal does not accept that the applicants took reasonable care to comply with section 14 of LT Act. The Tribunal finds that section 31(6)(a) does not apply.
[38] Section 31(6)(a) of the TA Act
[39] Section 31(6)(b) of the TA Act
The applicants say that the respondent’s actions and administrative failures, including the respondents failure to provide the applicants with sufficient information to alert them to their land tax obligations or that they were to be the subject of an investigation into their compliance with the LT Act, caused or contributed to their tax default. Also that the delay of more than eight months, between 10 September 2010 when settlement occurred and they took possession of the property and the issue of the 17 May 2011 rates notice, was the result of the actions by their mortgagee who did not register the transfer until 6 April 2011. The applicants submit that they were not aware of this delay, had no control over the delay and the delay meant that they should not be penalised, whatever other penalty might be imposed, for the period 21 Sept 2010 until at least they received the 17 May 2011 rates notice.[40]
[40] Exhibit A1
In the Tribunal’s view, this submission overlooks the requirement for the applicants, as the ‘new owners’,[41] to have advised the respondent in writing, pursuant to section 14(3)(b) of the LT Act, within 30 days after the rental which began on 21 September 2010. The registration of the transfer and the receipt of the 17 May 2011 rates notice were irrelevant to that obligation. Indeed, as the applicants advised, they were not aware that there had been a delay in the registration of the transfer. As noted above, these circumstances may have been relevant had the applicants provided the section 14 LT Act notice after receiving the 17 May 2011 rates notice. At that time the respondent may have accepted this explanation by the applicants for their delay in providing written notice that the property had been tenanted more than eight months earlier even though this was outside the 30 day period required by section 14(3)(b) of the LT Act. However, the Tribunal does not accept that this delay is now relevant to the consideration of this matter, or that the period from 21 September 2010 to 17 May 2011, or 23 June 2011, should attract the operation of section 31(6)(b) of the TA Act. The Tribunal does not accept that this delay in the registration of the transfer of the property to the applicants, if a factor at all, was the sole cause of the applicants’ failure to comply with section 14 of the LT Act. The Tribunal finds that section 31(6)(b) of the TA Act does not apply to the circumstances of this matter.
[41] Definition of ‘owner of a parcel of land’ in the LT Act
The respondent commenced an authorised investigation into the applicants’ land tax liability for the Forrest property prior to the issue of the section 82 notice to the applicant dated 9 April 2014.[42] Prior to the issue of the section 82 notice the respondent had conducted searches of the Australian Taxation Office, the Office of Rental Bonds and ACTEW AGL which indicated that the property was tenanted.[43] In the section 82 notice the respondent required the applicants to provide information relevant to the respondent’s determination of whether the applicants were liable for land tax for the property. The Tribunal accepts that an investigation had commenced and the section 82 notice to the applicants dated 9 April 2014[44] was valid.
[42] T Docs 61 with enclosures pages 62-65
[43] T Docs 58-60
[44] T Doc 61
Mr Harding, on behalf of the applicants, provided a written response to the section 82 notice on 22 April 2014.[45] In his response Mr Harding confirmed that the property had been rented from 21 September 2010 to 21 October 2013. In his response Mr Harding gave the following reason for not providing a written notice:
I don’t recall providing written advice. I do recall that I phoned the ACT govt at the time advising property was tenanted. I recall that the first rate notice was very late relative to settlement date.
[45] T Doc 65
At the hearing counsel for the respondent suggested to Mr Harding that, as compared with this initial response to the section 82 notice, Mr Harding’s later statements, that he recalled having sent an email, suggested his recollection had improved with time. Mr Harding explained that as the section 82 notice had required a response within 2 weeks, and the applicants were in the process of moving house, he had relied on his memory. He said that he knew that, once he was able to locate his copy of the 17 May 11 rates notice [46] on which he recalled that he had made notes, he would be better able to provide details of what he had done in 2011. Mr Harding said he had not expected that, without a further request for information, the respondent would issue the land tax assessment. However, without further contact, the respondent issued the land tax assessment dated 23 April 2014[47] which was for the period 21 September 2010 to 21 October 2013 and included amounts for penalty tax and interest.
[46] Exhibit A1
[47] T Doc 66-68
The applicants raised several concerns about the issue of the section 82 notice. They queried whether the respondent had in fact commenced an investigation at the time that the section 82 notice was issued, and suggest that the respondent in fact relied entirely on the information provided by the applicants in their response to the section 82 notice[48] in making the determination about the applicants’ land tax liability as set out in the 23 April 2014 land tax assessment.[49] The applicants submit that the respondent’s approach and the lack of effort made by the respondent to assist the applicants, as taxpayers, to identify and meet their land tax liability, are matters that are relevant to the Tribunal’s consideration of this matter. They assert that it was unfair and inappropriate that the approach taken by the respondent, including commencing the investigation without notice, denied the applicants the opportunity to voluntarily disclose relevant information. The applicants say that they did not intend to avoid their land tax liability. By commencing the investigation without notice the respondent effectively denied the applicants the opportunity to benefit from the operation of section 32 and 33 of the TA Act which would have allowed for a reduction by 80% or at least 20% of any penalty tax that might have been determined to be payable pursuant to section 31 of the TA Act.
[48] T Doc 65
[49] T Doc 66-68
The applicants accept that the respondent is not obliged to provide any notice to taxpayers of an intention to undertake an investigation. The Tribunal is satisfied that the respondent had already commenced an investigation into the applicants’ liability for land tax for the property at the time that the section 82 notice was sent to the applicants. The outcome of enquiries the respondent had made prior to the issue of the section 82 notice[50] suggested that the Forrest property was tenanted and that the applicants may be liable for land tax. There is no obligation on the respondent to make any preliminary contact with the applicants before commencing the investigation and, once having commenced the investigation, the opportunity for the applicants to benefit from the operation of section 32 and 33 of the TA Act is no longer available.
[50] T Docs 58-60
Whilst the Tribunal accepts that the applicants did not intend to avoid land tax liability, and even if they did not appreciate that they were not meeting this obligation until after receiving the 17 May 2011 rates notice,[51] the opportunity had existed from, at latest, when they received the 17 May 2011 rates notice (and indeed from 21 September 2010) for the applicants to take reasonable action to comply with, or disclose to the respondent their failure to comply with, section 14 of the LT Act.
[51] Exhibit A3
As noted above, the Tribunal finds that the applicants’ failure to take this action amounts to a failure to take reasonable care to do so. The obligation in section 14 of the LT Act rests with the applicants and there is no obligation on the respondent to assist the applicants or ensure they are aware of their obligation. That the respondent does provide information and assistance to taxpayers about land tax liability is a sensible approach, however that assistance is not a response to any legislative requirement. Sections 32 and 33 of the TA Act provide incentives for taxpayers to come forward and disclose their situation when they become aware of their need, or have failed to take necessary action, to comply with tax laws. Where taxpayers disclose information this is, in the long term, a saving to the respondent because the respondent does not then have to take action, by way of investigation, to identify situations where taxpayers are not meeting their tax obligations. However, the Tribunal is not satisfied that the respondent’s actions in this matter are relevant to the Tribunal’s consideration of whether the applicants have complied with section 14 of the LT Act.
The Tribunal is not satisfied that prior to the issue of the section 82 notice and the 23 April 2014 land tax assessment that the applicants took any steps to mitigate their failure to comply with section 14 of the LT Act. Although the action taken by Mr Harding subsequent to receiving the 17 May 2011 rates notice appears to demonstrate an intention to comply with section 14 of the LT Act, the Tribunal has concluded that the applicants did not comply with section 14 of the LT Act. Because the applicants failed to take any subsequent action until after they received the section 82 notice or the 23 April 2014 land tax assessment, these efforts are not sufficient to satisfy section 37(a) of the TA Act and it would not be fair and reasonable to now accept these actions as a basis for remission of all or part of the penalty tax in this matter.
The applicants submit that given Mr Harding’s actions in contacting the respondent at some time on or before 23 June 2011, the respondent’s failure to engage with, sufficiently inform or notify the applicants about their land tax liability prior to the 23 April 2014 land tax assessment, the Tribunal should be satisfied that circumstances that gave rise to the liability for penalty tax were exceptional and the Tribunal should remit all or part of the penalty tax.
The Tribunal accepts that the applicants did not intend to avoid land tax. The failure to notify the respondent, pursuant to section 14 of the LT Act, was initially (in the period from 21 September 2010 when the property was first tenanted and until after the first rates notice for the property dated 17 May 2011 was received) probably the result of an oversight, misunderstanding or failure to appreciate the obligation in section 14 of the LT Act. After, at latest, 23 June 2011 the ongoing failure was the failure either to provide the necessary written notice or to ensure that the notice had been received by the respondent. However, the applicants’ consistent evidence is that once the applicants believed that the notice had been sent, they took no further action until after either the section 82 notice dated 9 April 2014, or the land tax assessment dated 23 April 2014, was received. The Tribunal is not persuaded that any action by the respondent, either before or after the issue of the section 82 notice or 23 April 2014 land tax assessment, is relevant to the applicants’ actions. The Tribunal finds that there are no exceptional circumstances that exist within the meaning of section 37(a)(ii) of the TA Act, or that it would be fair and reasonable in the circumstances of this matter to remit all or part of the penalty tax determined to apply.
Summary of findings
For the reasons set out above the Tribunal finds that:
(a)The applicants did not comply with section 14 of the LT Act. This is a tax default to which section 31 of the TA Act applies.
(b)The applicants failed to take reasonable action to comply with section 14 of the LT Act and have not provided a reasonable excuse for that failure to comply. The Tribunal finds that neither section 31(3) nor section 31(6) of the TA Act apply to reduce the rate of penalty tax that should be applied. The Tribunal finds that the appropriate rate of penalty tax to be applied is 50% pursuant to section 31(2) of the TA Act.
(c)the Tribunal is not persuaded that the applicants took reasonable steps to mitigate the circumstances that lead to the penalty tax liability. Nor is the Tribunal satisfied that exceptional circumstances resulted in the penalty tax liability. The Tribunal finds that the evidence relied on by the applicants does not satisfy section 37(a)(i) or (ii) of the TA Act. The Tribunal finds that it would not be fair and reasonable to remit part or all of the penalty tax liability. The Tribunal is not persuaded to exercise the discretion afforded by section 37 of the TA Act to remit part or all of the penalty tax liability.
Conclusion
Pursuant to section 68(3) of the ACT Civil and Administrative Tribunal 2008 the respondent’s reviewable decision to impose penalty tax at a rate of 50% for the land tax liability determined from 21 September 2010 to 21 October 2013 for the Forrest property is confirmed.
Whilst the Tribunal understands that the applicants will be distressed by this decision, based on the evidence available to the Tribunal and notwithstanding the lengthy and detailed submissions made the by the applicants, the Tribunal has concluded for the reasons set out above that this is the correct and preferable decision.
………………………………..
President L Crebbin
for and on behalf of
Senior Member W Corby
HEARING DETAILS
FILE NUMBER: | AT15/43 & AT14/44 |
PARTIES, APPLICANT: | Peter Harding (AT15/43) Claire Harding (AT15/44) |
PARTIES, RESPONDENT: | Commissioner for ACT Revenue |
COUNSEL APPEARING, APPLICANT | N/A |
COUNSEL APPEARING, RESPONDENT | Mr Buckland |
SOLICITORS FOR APPLICANT | N/A |
SOLICITORS FOR RESPONDENT | ACT Government Solicitor’s Office |
TRIBUNAL MEMBERS: | Wilhelmena Corby |
DATES OF HEARING: | 11 December 2015 |
Schedule of Legislation
ACT Civil and Administrative Tribunal Act 2008
Review of decisions
(1)This section applies if the tribunal reviews a decision by an entity.
(2)The tribunal may exercise any function given by an Act to the entity for making the decision.
NoteA reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act, s 104).
(3)The tribunal must, by order—
(a)confirm the decision; or
(b)vary the decision; or
(c)set aside the decision and—
(i)make a substitute decision; or
(ii)remit the matter that is the subject of the decision for reconsideration by the decision-maker in accordance with any direction or recommendation of the tribunal.
Land Tax Act 2004
Commissioner to be told if residential land rented
(1)This section applies in relation to a parcel of land that—
(a)is leased for residential purposes; and
(b)is rented by a tenant.
(2)A relevant person must tell the commissioner, in writing—
(a)that the parcel is rented; and
(b)when the rental began.
Note 1If a form is approved under the Taxation Administration Act 1999, s 139C, the form must be used.
Note 2It is an offence to fail to notify the commissioner under this section (see Taxation Administration Act 1999, s 67 (2)).
Note 3It is also an offence to knowingly avoid paying, or disclosing a liability to pay, part or all of an amount of tax (see Taxation Administration Act 1999, s 65 (1)).
(3)The relevant person must tell the commissioner the information mentioned in subsection (2) not later than 30 days after—
(a)if there is a change of ownership of the parcel—the day the ownership changes; or
(b)in any other case—the day the rental begins.
(4)This section does not apply if the owner of the parcel of land is a corporation.
(5)In this section:
relevant person means—
(a)the owner of the parcel of land; or
(b)if the owner has authorised an agent to act on the owner’s behalf in relation to the rental of the parcel—the agent.
Examples—agent
accountant, real estate agent, solicitor
NoteAn example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
19AInterest and penalty tax payable on land tax if no disclosure
(1)This section applies if—
(a)land tax is imposed on a parcel of rateable land; and
(b)the owner of the parcel of land fails to comply with section 14 (Commissioner to be told if residential land rented) or section 14A (Commissioner to be told if residential land owned by an individual as trustee).
(2)The owner is liable to pay interest on the amount of land tax from the end of 30 days after the 1st day of the 1st quarter for which the tax is imposed.
(3)Interest on the amount of land tax is worked out—
(a)for each month that the amount is payable; and
(b)on the 1st day of that month; and
(c)at the interest rate applying to that day; and
(d)on the total amount of land tax that is payable on a day when the interest is worked out.
NoteThe Minister may determine an interest rate for this section under the Taxation Administration Act, s 139.
(4)For subsection (3) (a), if an amount of land tax is payable for part of a month, interest is payable for the whole month.
(5)The Taxation Administration Act, division 5.2 (Penalty tax) applies to the owner of the parcel of land as if—
(a)the owner’s failure to comply with section 14 or section 14A were a tax default; and
(b)a reference to interest under division 5.1 were a reference to interest under this section; and
(c)a reference to the amount of tax unpaid were a reference to the amount of land tax payable.
(6)This section applies to land tax imposed before or after the commencement of this section.
Remission of interest
(1)The commissioner may remit all or part of an amount of interest payable by a person in relation to land tax if the commissioner is satisfied that it is fair and reasonable having regard to—
(a)any circumstances that contributed to the delay in payment of the land tax; or
(b)any other relevant matter.
(2)The Minister may make guidelines for the exercise of a function under this section.
(3)Guidelines are a disallowable instrument.
NoteA disallowable instrument must be notified, and presented to the Legislative Assembly, under the Legislation Act.
Objections
The following decisions of the commissioner are prescribed for the Taxation Administration Act, section 100 (Objection):
(a)a decision under section 13 (1) (b) to refuse to exempt a parcel of land from land tax on compassionate grounds;
(b)a decision under section 13 (5) revoking an exemption given on compassionate grounds;
(c)a decision under section 36 (1) to refuse to remit interest payable by a person in relation to land tax;
(d)a decision under section 37 to refuse to pay interest on an overpayment or to pay interest other than from the date when the overpayment was made.
NoteAssessments are made under the Taxation Administration Act and objections may be made under that Act, s 100 (1) (a). For example, if a person is given an assessment for land tax and the person is dissatisfied with the assessment because land tax was not payable in relation to the parcel of land, the person may object under that paragraph.
Review of decisions by ACAT
(1)This section applies to a determination by the commissioner of an objection to a decision mentioned in section 38 , other than a decision mentioned in section 38 (c).
(2)The determination is prescribed for the Taxation Administration Act, section 107A (Meaning of reviewable decision etc—div 10.2).
Note Applications for review by the ACAT may be made in relation to a determination by the commissioner of a decision on an objection to an assessment.
Dictionary
owner, of a parcel of land means—
(a)the registered proprietor of an interest in the parcel (other than an interest in a lease granted by a person other than the Territory or the Commonwealth); or
(b)if the registered proprietor has sold the interest to another person (the new owner) and the new owner is in possession of the parcel but not yet registered as the proprietor—the new owner; or
(c)a mortgagee in possession of the parcel; or
(d)a person holding the parcel under a sublease from the Territory, if the Territory holds the parcel under a lease from the Commonwealth; or
(e)for a parcel held under a land sublease—the sublessee.
Amount of penalty tax
(1)The amount of penalty tax payable in relation to a tax default is 25% of the amount of tax unpaid, subject to this division.
(2)The amount of penalty tax payable in relation to a tax default is 50% of the amount of tax unpaid if the commissioner is satisfied that the tax default was caused wholly or partly by a failure by the taxpayer (or a person acting on behalf of the taxpayer) to take reasonable care to fulfil the taxpayer’s obligations under a tax law.
(3)Subsection (2) does not apply if the tax payer satisfies the commissioner that the taxpayer (or a person acting on behalf of the taxpayer) had a reasonable excuse for the failure.
(4)Subsections (2) and (3) apply to a tax default that happened before their commencement in the same way as they apply to a tax default that happened after their commencement.
(5)The amount of penalty tax payable in relation to a tax default is 75% of the amount of tax unpaid if the commissioner is satisfied that the tax default was caused wholly or partly by the intentional disregard by the taxpayer (or a person acting on behalf of the taxpayer) of a tax law.
(6)No penalty tax is payable in relation to a tax default if the commissioner is satisfied that—
(a)the taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with the tax law; or
(b)the tax default happened solely because of circumstances beyond the taxpayer’s control (or if a person acted on behalf of the taxpayer, because of circumstances beyond either the person’s or the taxpayer’s control) but not amounting to financial incapacity.
NoteThe commissioner’s decision to impose penalty tax is an internally reviewable decision (see s 107, def internally reviewable decision), and the commissioner must give an internal review notice to the taxpayer (see s 107B).
Reduction in penalty tax for voluntary disclosure
The amount of penalty tax determined under section 31 is reduced by 80% if, before the commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out, the taxpayer discloses to the commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.
Reduction in penalty tax for disclosure before investigation
The amount of penalty tax determined under section 31 is reduced by 20% if, after the commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out and before it is begun, the taxpayer discloses to the commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.
Remission of penalty tax
The commissioner may remit all or part of an amount of penalty tax payable by a person if satisfied that—
(a)either—
(i)the person has taken reasonable steps to mitigate, or to mitigate the effects of, the circumstances that resulted in the liability for penalty tax; or
(ii)the circumstances that resulted in the liability for penalty tax were exceptional; and
(b)it would be fair and reasonable to remit all or part of the penalty tax.
NoteThe commissioner’s decision to refuse to remit penalty tax payable by a person is an internally reviewable decision (see s 107, def internally reviewable decision), and the commissioner must give an internal review notice to the person (see s 107B).
Objection
(1)A taxpayer may lodge a written objection with the commissioner if the taxpayer is dissatisfied with—
(a)an assessment, other than a compromise assessment, that is shown in a notice of assessment served on the taxpayer; or
(b)a decision mentioned in schedule 1 or schedule 2; or
(c)a decision under a tax law that is prescribed under the law for this section.
NoteDecisions are prescribed for this section under the following Acts:
·Duties Act 1999, s 252
·Land Rent Act 2008, s 33
·Land Tax Act 2004, s 38
·Rates Act 2004, s 70.
(2)An objection must be accompanied by the fee (if any) determined under section 139A (Determination of fees) for the objection.
(3)The commissioner must refund a fee paid under this section if—
(a)the commissioner allows the objection in whole or in part; or
(b)the taxpayer applies to the ACAT and—
(i)the ACAT, or a court hearing an appeal on the matter, upholds the objection in whole or in part; or
(ii)the period when any further appeal can be made has ended; and
(iii)neither the taxpayer nor the commissioner has applied to the ACAT in relation to a part of the objection that was upheld.
Grounds for objection
(1)The grounds for the objection must be stated fully and in detail, and must be in writing.
(2)The grounds for the objection, for a reassessment, are limited to the extent of the reassessment.
(3)The burden of showing that an objection should be sustained lies with the taxpayer making the objection.
Recovery of tax pending objection or review
The fact that an objection or review is pending does not affect the assessment or decision to which the objection or review relates, and tax may be recovered as if no objection or review were pending.
107AMeaning of reviewable decision etc—div 10.2
(1)For this division, a reviewable decision is a determination by the commissioner of an objection by the taxpayer to—
(a)an assessment; or
(b)a decision mentioned in schedule 1, section 1.2; or
(c)a decision under a tax law that is prescribed under the law for this section.
(2)For the ACT Civil and Administrative Tribunal Act 2008, section 9 (Applications under authorising laws), the tax laws are taken to be a single authorising law.
108BGrounds of review
(1)The appellant’s and respondent’s cases on a review mentioned in section 108A are not limited to the grounds of the objection.
(2)However, if the objection was to a reassessment, the grounds of the review are limited to the extent of the reassessment.
Schedule 1Decisions reviewable by commissioner and ACAT
(see s 100, s 107 and s 107A)
1.1Objections and reviews
A person dissatisfied with a decision mentioned in section 1.2 may—
(a)lodge an objection under section 100; and
(b)if dissatisfied with the determination of the objection—apply to the ACAT under section 108A (Applications for review).
1.2Decisions subject to objection or review
Section 1.1 applies to a decision—
(a)under section 8 determining the existence and effect of a tax avoidance scheme; or
(b)under section 18F refusing an application for a beneficial organisation determination; or
(c)under section 18F revoking a beneficial organisation determination; or
(d)under section 31 to impose penalty tax; or
(e)under section 34 to impose increased penalty tax; or
(f)under section 37 refusing to remit penalty tax; or
(g)under section 40 (5) revoking a variation previously granted in relation to requirements for a return; or
(h)under section 43 refusing an application for special arrangements for lodgment of returns or methods of payment; or
(i)under section 44 imposing conditions on an approval under section 43; or
(j)under section 45 varying or cancelling an approval under section 43; or
(k)under section 103 refusing permission to lodge a late objection.
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