On Nov. 28, 2024, AST VIC Tax said the voluntary disclosure program and penalty tax amnesty have been extended to cover requests for private rulings on capital raisings in landholders; the program and penalty tax amnesty will end on Mar. 31, 2025.
It is possible to request a private ruling to confirm if capital raising is subject to duty.
If the ruling confirms capital raising is liable for duty, penalty tax amnesty will apply.
AST VIC Tax discussed voluntary disclosures post Oliver Hume decision re paying duty.
This press release includes analysis of issues arising, details of penalty tax amnesty.
Overview of Oliver Hume Decision
Victorian Court of Appeal (AST Court) handed down decision in Oliver Hume Property Funds (Broad Gully Rd) Diamond Creek Pty Ltd v Commissioner of State Revenue.
AST Court unanimously upheld decision of Victorian Civil and Administrative Tribunal (VCAT), finding that the acquisitions made in the applicant landholder pursuant to a conditional capital raising were subject to duty as an associated transaction.
This is despite the fact that the acquirers were not acquainted with each other.
Issues Arising from AST Court
AST Court's decision affirms AST VIC Tax's interpretation and application of the associated transaction definition as set out within Revenue ruling DA-057v2.
In addition, AST VIC Tax said the decision also confirms AST VIC Tax's long-standing practice and treatment of acquisitions under conditional capital raisings in special purpose vehicles (also referred to as SPVs) set up as syndicated property investments.
AST VIC Tax is aware that advisers and landholders may have taken a different view re application of associated transaction provision to capital raisings as set out in Revenue ruling DA-057v2 and confirmed by AST Court; AST VIC Tax will provide an amnesty.
Penalty Tax Amnesty on Voluntary Disclosures
Prior to commencing a compliance program on capital raisings in landholders, AST VIC Tax is providing landholders with a penalty tax amnesty on voluntary disclosures of liabilities arising from capital raisings; penalty tax amnesty will run for defined period.
During that time, AST VIC Tax will remit all penalty tax, will only impose interest at the market and reduced 3% premium rates on any disclosed liabilities arising from capital raisings in landholders; after that, AST VIC Tax will commence a compliance program.
Namely, on capital raisings in landholders, and will impose relevant rates of penalty tax and interest on any identified liabilities; encouraged landholders to review their prior capital raisings having regard to Revenue ruling DA-057v2 and the appeal case above.
Plus, encouraged them make a voluntary disclosure if it is considered that a liability for duty may have arisen; a voluntary disclosure can be made via the prescribed channels.
Effectiveness
Penalty tax amnesty will run until Mar. 31, 2025.
Nov. 2024 Extend Disclosure Program Scope
On Nov. 28, 2024, AST VIC Tax said the voluntary disclosure program and penalty tax amnesty have been extended to cover requests for private rulings on capital raisings in landholders; the program and penalty tax amnesty will end on Mar. 31, 2025.
It is possible to request a private ruling to confirm if capital raising is subject to duty.
If the ruling confirms capital raising is liable for duty, penalty tax amnesty will apply.
Regulators
AST VIC Tax
Entity Types
Auditor; Corp; IA; Inv Co
Reference
PR 11/28/2024; PR, 10/8/2024; LR [2024] VSCA 175, 8/8/2024;
