Tadcaster Sorrento v Commissioner of State Revenue (Review and Regulation) [2015] VCAT 611
This matter arose from the Commissioner’s decision to exercise his discretion under s50 of the LTA to treat the taxpayer and its related corporations as a single corporation (grouping discretion) and assess them jointly for land tax on all lands owned by them in the 2010, 2011 and 2012 land tax years.
The taxpayer argued that the discretion to treat the related corporations as a single corporation should only be exercised if there had been a purpose or intention of avoiding land tax. The Commissioner argued that the discretion was not so limited, and was to be exercised taking into account a broad range of factors, including in this case that the group corporations were all wholly owned subsidiaries of the same parent company.
The Tribunal upheld the Commissioner’s decision. It agreed that the grouping discretion is not confined: “Its purpose is to protect the aggregation principle established by the Act ... the discretion requires consideration of such matters as the degree of relatedness of the companies under consideration, the degree of control by the directors of the day-to-day activities of each company, the uses to which the separate parcels of land are put, and the negative impact if any on the taxpayer of the exercise the discretion, as well of course as matters relating to whether the structure has been designed to avoid the payment of tax.”
