Section 254 of the ITAA imposes obligations on agents
and trustees concerning income, profit or gains of a capital
Application of the section extends to liquidators, receivers and
administrators by virtue of the extended definition given to the
term "trustee" in section 6(1) of the ITAA.
Section 254 provides that agents and trustees are:
responsible for the taxation consequences;
required to lodge returns
assessed in their personal capacity
required to retain funds sufficient to pay "tax which is
or will become due"1
made personally liable.
Draft Determination TD2012/D72 makes it clear that a
receiver's obligations under section 254 are no different
notwithstanding the fact that:
the receiver is bound to apply money received from the disposal
of the debtor's assets to meet the debts of his or her
appointor, the secured creditor; and/or
the arrangements for disposal of the relevant asset provides
that the proceeds are payable direct to the secured creditor.
The draft ruling dispels any contention that a receiver is
acting other than as agent of the debtor even though they have
obligations to their appointor, because in receiving proceeds from
the disposal of the debtor's assets the receiver is not trustee
or agent of the secured creditor.
Accordingly, the receiver must, as trustee/agent of the debtor,
retain sufficient funds to pay the tax liability.
The position of receivers is contrasted, in the draft
determination, with that of a mortgagee who goes into possession
and appoints an agent to sell the debtor's property. In that
situation the agent is the agent of the mortgagee and not the agent
of the debtor. Accordingly, section 254 does not apply to the
1 A separate draft determination TD2012/D63
also makes it clear that the term "tax which is or will become
due" is not restricted to tax that has been assessed, and
includes tax that will become due when an assessment is made. That
is, the obligation to retain an amount, to pay a tax liability, may
arise in respect to the tax that has not yet been assessed. 2 TD2012/D7 is proposed to apply to arrangements begun
to be carried out from the date that the final determination is
issued. 3 TD2012/D6 is proposed to apply both before and after
the date that the final determination is issued but will not apply
to tax payers to the extent that it onflicts with the terms of
settlement of a dispute agreed to before the date of issue of the
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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