The ACT Civil and Administrative Tribunal has held that penalty tax imposed on a taxpayer for land tax default in relation to a rental property over a 10-year period should be reduced as it found there were varying circumstances of the taxpayer that were not adequately considered by the Commissioner.

  • The taxpayer was the owner of the property and was liable for land tax for 5 rental periods between 2002 to 2012.
  • The land tax was not disputed.
  • The key issue concerned the imposition of penalty tax and interest.
  • The Commissioner had imposed penalty tax for unpaid land tax at the rate of 200% for pre-1 July 2004 periods and 50% for post-1 July 2004 periods.
  • Statutory interest was also imposed for the post-1 July 2014 periods only.

The Tribunal found that varying circumstances of the taxpayer were not considered and justified a reduction in penalties.

  • The circumstances noted by the Tribunal included the taxpayer’s care of family members with severe medical issues and the impact that had had on the taxpayer personally noting his circumstances were “more extreme in nature, impacted the [taxpayer] for a longer period of time”.
  • The Tribunal ordered that penalty tax should be reduced to 25% for pre-31 December 2006 periods and to 30% for post-1 January 2007 periods. The Tribunal said the Commissioner’s decision to impose interest including its calculation method is not reviewable; however, it noted the Commissioner has agreed there was an error in the interest calculated and that a refund was due to the taxpayer.

(Hay v Comr for ACT Revenue (Administrative Review) [2014] ACAT 23, ACT Civil and Administrative Tribunal, Beacroft M, 17 April 2014.)

[LTN 29/4/14]