An individual (the taxpayer) has been unsuccessful before the WA District Court in arguing that his former wife, and not himself, was the sole trustee of a family trust at all material times.
The Deputy Commissioner had claimed there were monies that were due and owing by the taxpayer pursuant to a running balance account (RBA) in the joint names of the taxpayer and his former wife in their capacities as trustees of the family trust. The underlying tax issue concerned a GST assessment for the June 2007 quarter. The Court heard that, as at 14 December 2012, the running balance was $104,066.
The Court noted the taxpayer and his former wife were registered in the Australian Business Register (ABR) as the trustees of the family trust on 21 April 2000 and that this remained the case at all material times. In this regard, the Court said there was no dispute that the Deputy Commissioner had established a prima facie case that the taxpayer was a trustee of the family trust at all material times and was indebted to the Commissioner for the current balance of the family trust’s RBA.
The taxpayer submitted that his details were erroneously entered on the ABR as trustee by an employee of his accounting practice and that he should have been only registered as a contact person and tax agent. The taxpayer also contended the ATO had accepted that he was only the contact person or tax agent in various interactions.
The Court was not satisfied that, on the balance of probabilities, the taxpayer was not a trustee of the family trust at all material times. In conclusion, the Court held the taxpayer was a trustee of the family trust at all material times and was liable to the Deputy Commissioner as claimed.
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