Claimant Ordered to Pay Interest on Late Lodgment for Land Tax

The Tribunal ordered the claimant to pay interest on late lodgment for land tax for the years 1997, 1998, 1999, and 2000, at the rate of 8% plus a variable market rate of 4.89%. The claimant argued that they were unaware of the land tax liability and had always paid other taxes and duties.

CITATION: [NAME] -v- [NAME] [2002] NSWADT 106 DIVISION: Revenue Division APPLICANT PARTIES: [NAME] RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 016015 HEARING DATES: 22/03/02 SUBMISSIONS CLOSED: 03/22/2002 DATE OF DECISION: 06/28/2002

BEFORE: [NAME] Member APPLICATION: Taxation Administration Act - liability to pay interest MATTER FOR

DECISION: Principal matter LEGISLATION CITED : Taxation Administration Act 1996 CASES CITED: APPLICANT REPRESENTATION: In person RESPONDENT [NAME], agent ORDERS: That the interest on late lodgment for the years 1997, 1998, 1999 and 2000 is payable, and this would be at the rate of 8% plus a variable market rate of 4.89%

1 The Applicant has applied for a review of the decision by the Commissioner in relation to properties owned by him and his wife at Castle Cove, Manly and Baulkham Hills. 2 The Applicant has owned land in New South Wales since 1982. From that date until such time as he completed a questionnaire forwarded to the Applicant and his wife by the Commissioner, he had not been aware of any liability to pay land tax in respect of the land that he held. 3 Following completion of the questionnaire and receipt of that questionnaire by the [NAME], the Commissioner proceeded to assess the Applicant as to a liability for land tax for the years 1997, 1998, 1999 and 2000 in respect of land held by the Applicant and proceeded to raise interest and penalty tax on the amount of the land tax in respect of each of the years. 4 The Applicant made submissions to the Commissioner in relation to the payment of the penalty for late lodgment and the Commissioner used the discretion, that the Commissioner has, to remit the penalty tax for late lodgment. 5 The initial application to the Tribunal related to the properties referred to and another property at Baulkham Hills. The issue concerning the Baulkham Hills property has now been resolved between the Applicant and the Commissioner and is no longer subject of this application. 6 The Applicant submitted that he and his wife were not aware of the land tax liability and that they have always attended to payment of all taxes and liabilities in relation to their land holdings ensuring that they completed their tax returns and made payment of any tax liability and stamp duties for every year that they have been land owners. There is no doubt that the Applicant did not know of any of his liabilities to assessment for land tax and promptly returned the questionnaire received to the [NAME] on 3 January 2001 after receipt thereof in December 2000. There is also no doubt that had the Applicant been aware of the liability to pay Land Tax that he would have done so as he had managed their property in the past including payment of other duties and attending to negative gearing. 7 There has been correspondence between the Applicant and the Commissioner in relation to land tax payable and the imposition of penalty tax. The Commissioner remitted the penalty tax in respect of the land tax assessed. 8 The Applicant is not the only party liable to land tax that has not been aware of the requirement for assessment pursuant to the Land Tax Management Act, 1956. The Commissioner pursuant to that Act has a discretion to remit penalty tax as has been done in this instance. As a matter of public policy, the responsibility of the ownership of the property including the necessity to be assessed and pay rates and taxes on the property remains with the Applicant which pursuant to the Land Tax Management Act, 1956 places the responsibility on the Applicant to furnish a return to the Commissioner to allow the assessment to be undertaken. In the event that such an assessment had been made and the land tax had been paid, the Applicant would not have had the use of that money for the period since. 9 The submissions by the Applicant and those by the representative of the Commissioner have been considered and taking into account that the Commissioner has remitted all penalty tax payable and noting that if the Applicant had been aware that land tax was assessable then he would have attended to payment of that at the appropriate time in respect of land tax payable for 1997, 1998, 1999 and 2000, I therefore make the following orders: That the interest on late lodgment for the years 1997, 1998, 1999 and 2000 is payable and this would be at the rate of 8% plus a variable market rate of 4.89%.

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