Private ruling: Tax liability of Receivers and Managers
Date of advice: 27 September 2017
Published: February 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: ls there an obligation on the Receivers and Managers, under Sub-division 260-C of Schedule 1 to the Taxation Administration Act 1953 (TAA) to account to the Commissioner for the pre-appointment taxation liabilities of a company? | A1: No.


Relevant legislative provisions: Taxation Administration Act 1953 Section 260-75 | Taxation Administration Act 1953 Subsection 260-75(1)

Reasons for decision: Detailed Reasoning - Receiver’s Obligation: All legislative references that follow are to the Taxation Administration Act 1953 unless stated otherwise. Subsection 260-75(1) applies to a person (the receiver ) who, in the capacity of receiver, or of receiver and manager, takes possession of a company's assets for the company's debenture holders. In this case, a review of the information provided indicates that the company did not hold a security with financial institution as the security over the assets was held with the partnership under a security agreement. Accordingly, as the Receivers were appointed by the partnership’s debenture holder to recover assets subject to the security, subsection 260-75(1) has no application to the Receivers.

Relevant facts: A partnership operated a number of businesses. | The partnership held a number of assets. | The assets held by the partnership were subject to securities granted by a financial institution. | A court order issued in respect of partners of the partnership. | Under the court order one partner was required transfer to the other partner plant and equipment of the partnership. | The partnership assets were subsequently transferred to a company. | The financial institution did not release the transferred assets which were subject to the security to the company. | The financial institution exercised its rights under the terms of the securities agreement with the partnership to appoint Receivers and Managers to recover the assets subject to the security. | The Receivers and Managers recovered all the transferred assets which were subject to the security agreement. | The Receivers and Managers subsequently sold all the assets. | The Receiver and Manager were not appointed as receivers or managers over the company.