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Overview by Corrs Chambers Westgarth, Taxand Australia
Angelina Lagana, Luke Imbriano and Nathan Unitt from our Australian member firm Corrs Chambers Westgarth have recently published an overview of the Full Federal Court decision, Ziegler v Commissioner of Taxation, which considers how trying to get around an ATO settlement can lead to a threefold increase in penalties, a taxable recoupment and a section 177EA determination.
The Court confirmed that refunded GIC can be taxed if it was previously deducted, that the ATO can increase penalties during an objection (even to very high levels) without time limits, and that the ATO can use s177EA where a taxpayer restructures to claw back the effect of a settlement by generating refundable franking credits. The Court also said that arguing the ATO breached a settlement agreement isn’t a way to reduce an assessment – that must be dealt with separately as a contract issue.
You can read the full overview here.
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