This matter concerned penalty tax and interest (both market and premium) imposed under Part 5, ss24-35 of the Taxation Administration Act 1997 (Vic) (the TAA).
The taxpayer, a university-educated restaurateur, entered into a contract to purchase an apartment in South Melbourne in August 2006. Through the taxpayer’s solicitors, the off-the-plan duty concession was falsely claimed by backdating the contract. The amount of the concession available depends on the level of construction at the time of entry into the contract. No concession is available if construction has been completed.
On the facts, 100 per cent of the construction works had taken place at the time the taxpayer had entered the contract. The transaction was therefore ineligible for the off-the-plan duty concession.
The Commissioner had assessed the taxpayer for the difference in duty that should have been paid, based on completed construction, together with penalty at a rate of 75 per cent for intentional disregard of a tax law and premium interest.
On 12 June 2012, the Tribunal confirmed the Commissioner’s assessment, finding that “it was not reasonable for the applicant to continue to rely on Mr K. and her solicitors after she became aware of there being something seriously untoward about the purchase transaction, the applicant could not `shut her eyes‘ to evidence of falsity and/or fraud and continue to claim that she was taking reasonable care to comply with Victoria’s taxation laws”. There was no basis for remission of penalty or interest in the circumstances.
