The AFR published two articles on the weekend focused on a court battle between one of Australia’s wealthiest families and the Australian Taxation Office. Tax partner Jonathan Ortner is quoted in both articles.
The case involves what is believed to be the first family trust election case to land in court since the Tax Office began hitting family trusts with significant bills for unpaid taxes and penalties over incorrect family trust distributions dating back more than 30 years.
In a case filed in the Federal Court in September, the Thomas family is seeking to undo the effects of an incorrect family trust election that resulted in the distribution of money outside their family group and left them with a multi-million-dollar family trust distribution tax (FTDT) liability.
Asked whether case may lead to other family trusts bringing similar cases against the Tax Office, Jonathan says he believes there will be many FTDT cases come to court over the next few years. “There is just too much money at stake in some instances. This will be ‘bet the farm’ contests.
“Frankly, this is just the tip of the iceberg with what I’m seeing and what others are seeing in practice … There is no question that taxpayers in similar circumstances will be watching this case closely and the precedent it may set, particularly in relation to rectification.”
To read the articles, click here and here.
