The NSW Civil and Administrative Tribunal has affirmed the Commissioner’s decision to impose on a taxpayer a 75% penalty tax for “intentional disregard” in relation to the taxpayer’s tax default as a result of incorrectly claiming the principal place of residence (PPR) land tax exemption in respect of a property for the 2000 to 2006 land tax years.

In May 2012, the Commissioner reversed the PPR exemption previously allowed in relation to the subject property and issued a land tax assessment with 75% penalty tax and interest. Before the Tribunal, the taxpayer’s application for review was restricted to the penalty tax imposed for the 2000 to 2006 land tax years. The taxpayer argued she had held a “mistaken belief” that she was entitled to one property from all the properties she owned as her PPR and was entitled to rent out part of that property and still retain the exemption, and that her belief was based on advice she had received about land tax “generally”. The taxpayer also submitted that, at all relevant times, she was adversely affected by her medical condition which impaired her cognitive capacity, reasoning and judgment.

The Tribunal found it was “unable to rely on the [taxpayer’s] uncorroborated evidence in support of her application”. It was also “not satisfied that it is more likely than not that the [taxpayer] took reasonable care to comply with the taxation law”. Accordingly, it affirmed the Commissioner’s decision.

(Neal v Chief Comr of State Revenue [2014] NSWCATAD 26, NSW Civil and Administrative Tribunal, Isenberg SM, 14 March 2014.)

[LTN 51, 17/3/14]