respondent. The decision under review is affirmed; no remission of penalty tax or interest was granted.
Key principles
The Tribunal will not remit penalty tax under s 27(3)(a) of the TA Act where the taxpayer (or person acting on their behalf) has not taken reasonable care to comply with the...
In exercising the broad discretion to remit penalty tax under s 33 of the TA Act, previous findings that reasonable care was not taken are a strong basis for refusing remission...
The premium component of interest may be remitted only in limited circumstances; the Tribunal applied the Incise Technologies criteria (cooperation, timing of disclosure, no...
There is no general legal duty on the Commissioner to warn taxpayers of their obligations under the SPD regime; it is a self-assessment system and taxpayers (or those acting for...
Issues before the court
Whether penalty tax imposed under the Taxation Administration Act 1996 (NSW) should be remitted under s 27(3)(a) on the ground the taxpayer took...
Whether the Tribunal should exercise the discretionary remission power under s 33 of the TA Act to remit penalty tax despite a finding of lack of...
Plain English Summary
Ms Denton and her husband bought vacant residential land while she held a Bridging A visa. Revenue NSW assessed surcharge purchaser duty on her 50% share and imposed penalty and interest for late payment. Before the Tribunal hearing she accepted liability for the duty and challenged only the penalty and interest. The Tribunal found that her husband, who completed the purchaser declaration, failed to exercise reasonable care (he incorrectly recorded visa details and did not seek confirmation from the conveyancer). Because reasonable care was not shown, the Tribunal refused to remit penalty tax under s 27(3)(a) or under the general discretion in s 33, and refused to remit interest (both market and premium components) under s 25, applying established criteria from Incise Technologies and relevant authorities. The Chief Commissioner's decision was affirmed.
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Deep Dive
1,783 words · generated 29/06/2026
Whether interest (market and premium components) payable under the Taxation Administration Act 1996 (NSW) should be remitted under s 25.
Whether the applicant's later grant of permanent residency or the design of Revenue NSW materials justifies remission of penalties or interest.
Cited legislation
5 cited instruments linked from this judgment.
What happened
Ms Chayaphorn Denton and her husband contracted to buy a block of residential land in New South Wales on 4 December 2020, settled on 29 January 2021 and were registered as joint tenants (see Reasons [1]-[6] of the decision). At the time of contract and settlement the applicant held a Bridging A visa; she was subsequently granted permanent residency (subclass 189) on 26 March 2021 (see 'The facts'). Revenue NSW investigated the transaction and issued a Duties Notice of Assessment on 18 August 2023 assessing surcharge purchaser duty (SPD) on the applicant's 50% share ($18,800), together with penalty tax (20% reduced to $3,760) and interest ($4,263.69) for late payment (see 'The investigation' and 'Material before the Tribunal').
The applicant objected but, before the Tribunal hearing, accepted liability for SPD and limited her dispute to remission of penalty tax and interest (see 'REASONS FOR DECISION' paragraphs 2 and the later statement at 'The decision under review' that the applicant had conceded liability). The Tribunal heard evidence, including sworn oral evidence from the husband (who completed the purchaser/transferee declaration on the applicant's behalf), considered documentary material, and dismissed the application: the decision under review was affirmed and no remission of penalty or interest was allowed.
Why the court decided this way
The Tribunal's decision rested on statutory criteria and established authorities concerning remission of penalty tax (s 27(3) and s 33 of the Taxation Administration Act 1996 (NSW)) and remission of interest (s 25). Two interlocking themes dominated the reasoning.
Reasonable care under s 27(3)(a): s 27(3)(a) allows a determination that no penalty tax is payable if the taxpayer (or a person acting on the taxpayer's behalf) "took reasonable care to comply with the taxation law". The Tribunal analysed the conduct of the person acting on behalf of the applicant (her husband, Mr Denton) and the conveyancer. It accepted that the applicant reasonably relied on her husband, and accepted his evidence as honest, but concluded that Mr Denton did not take the steps a reasonable person in his circumstances would have done: he completed the declaration incorrectly (recording the applicant's visa as 'sub-class 189'), did not provide copies of visas to the conveyancer, and did not obtain confirmation from the conveyancer that the declaration and visa data were correct (see 'Relevant findings regarding Mr Denton' and 'Reasonable care - s 27(3)(a)'). On that basis the precondition to exercise the s 27(3)(a) discretion was not satisfied and the Tribunal refused remission on that ground.
Discretion under s 33 and the absence of 'special circumstances': s 33 confers a wide remission power, but the Tribunal applied the principle from the Supreme Court and Court of Appeal authorities (Bayton and Downer) that where reasonable care has not been shown remission under a general discretion will not ordinarily be exercised unless there are special circumstances (see 'Section 33' and citation of Bayton and Downer). The Tribunal found no special circumstances: the applicant's later grant of permanent residency and complainants about Revenue NSW's guidance did not meet this threshold.
Remission of interest under s 25 and the Incise criteria: The Tribunal applied the four factors identified in Incise Technologies (payment or arrangement for payment of principal tax, cooperation in providing information, timing of disclosure, absence of wilful default) as relevant, particularly to the premium component of interest (which is penal in nature), and noted that the market component is very rarely remitted (see 'Interest - Market rate component' and 'Interest - Premium component'). It found that while there had been cooperation and a payment plan, the absence of reasonable care by the husband meant no exceptional circumstances existed to remit the premium component; the market component was not remitted.
The net result was that the Tribunal affirmed Revenue NSW's decision to impose SPD, penalty tax and interest and refused to remit either penalty or interest.
Before and after state of the law
Before this decision, the governing authorities on remission included Incise Technologies (four Incise criteria for remission of interest), Bayton Cleaning and Downer EDI (limits on s 33 remission where reasonable care is not shown), and various Tribunal authorities on what constitutes reasonable care (Qualweld, RVO Enterprises, Levitch). The Tribunal applied and reconciled those authorities.
This decision:
Reaffirms that a finding of lack of reasonable care by a person acting for the taxpayer can defeat a taxpayer's claim to remission even where the taxpayer personally relied on that person (the Tribunal expressly applied that reasoning as a basis to refuse s 27(3)(a) relief).
Reiterates that the general s 33 discretion is unlikely to be exercised where reasonable care is absent, absent special circumstances, consistent with Bayton and Downer.
Follows established Incise criteria for remission of the premium component of interest and emphasises the reluctance to remit market rate interest.
In short, the decision reinforces existing lines of authority: reasonable care is a stringent threshold; cooperation and payment plans help, but do not override a finding of no reasonable care.
Key passages with plain-English translation
"The Tribunal's task is to decide what the correct and preferable decision is having regard to the material before it at the time of the hearing." [2]
Plain English: The Tribunal must reassess the matter afresh on the evidence before it at the hearing and decide what the right outcome is.
"I found Mr Denton to be an honest and reliable witness." [Relevant findings regarding Mr Denton]
Plain English: The Tribunal accepted the husband's account of events as truthful, so the decision is not based on disbelief but on the legal import of what he did and did not do.
"There is no duty on the Commissioner to warn a taxpayer regarding their liability to SPD. It is a self-assessment system."
Plain English: Revenue NSW is not obliged to proactively tell purchasers they may be liable for SPD. Taxpayers or their advisers must take steps to ensure declarations are correct.
"The market rate component ... could rarely, if ever, be waived."
Plain English: The portion of interest that reflects normal market interest is almost never forgiven because it compensates Revenue for the time value of money.
Incise criteria summary (as applied): cooperation, timing of disclosure, payment of principal, and absence of wilful default are relevant; they are not exhaustive; reasonableness remains central.
Plain English: To get remission of the penal part of interest you usually need to show you paid or arranged to pay the tax, cooperated early and honestly with the revenue authority, and did not deliberately default.
What fact patterns trigger this precedent
This decision is most directly relevant where:
A purchaser of residential land is assessed to surcharge purchaser duty because they are a foreign person at the time the liability arises (e.g. holding a bridging visa).
The taxpayer challenges only penalties and interest and not the principal duty.
The taxpayer relied on a third party (spouse, conveyancer, agent) to complete purchaser/transferee declaration forms.
The person acting for the taxpayer provided incorrect visa or residency information on forms, failed to provide supporting visas to the conveyancer, and did not seek confirmation or advice.
The taxpayer cooperated with Revenue NSW during investigation and entered a payment plan, but reasonable care by the person acting for the taxpayer cannot be established.
Under these circumstances, this decision demonstrates that remission of penalties and of the premium component of interest is unlikely unless the taxpayer or their agent can show the steps a reasonable person would have taken were in fact taken, or there are special circumstances sufficient to displace the general rule.
How later courts have treated it
As this is a recent Tribunal decision dated 25 July 2024, subsequent treatment by courts is not in the decision. The Tribunal expressly engaged with and applied prior authorities (Incise, Bayton, Downer, Levitch, Nhem) and distinguished comparable Tribunal decisions that produced different outcomes (Shah, Galle) on their facts. Practitioners should note that the Tribunal is continuing the line that emphasises a strict approach to 'reasonable care' and that s 33 relief is constrained by Bayton/Downer where reasonable care is lacking. Any later appellate or other Tribunal consideration may either reinforce or refine the approach to reliance on third parties and what constitutes 'special circumstances' under s 33.
Still-open questions
The limits of 'special circumstances' under s 33: This decision follows Bayton and Downer in refusing remission where reasonable care was absent; what precise factual configurations would constitute 'special circumstances' sufficient to overcome a finding of no reasonable care remains fact dependent and may invite future litigation. The Tribunal emphasised the absence of such circumstances here, but did not exhaustively catalogue what would suffice (see 'Section 33').
The role of third-party reliance: The decision confirms that reliance on a spouse or conveyancer does not automatically establish reasonable care. There remains practical uncertainty about the quantum of action required from a non-expert acting for a taxpayer to meet the 'reasonable care' threshold. The Tribunal suggested (and applied) that a reasonable person in Mr Denton's position would have provided correct visa details and sought confirmation from the conveyancer; future cases may test whether less would ever suffice, particularly where language or capacity issues are acute.
Design and adequacy of Revenue NSW materials: The Tribunal acknowledged that the Explanatory Notes at the time were not directed to bridging visas and 'may have been less than helpful', but held that this did not displace statutory onus or remedial thresholds. Whether poor guidance of sufficient quality and foreseeability could, in some cases, constitute a 'special circumstance' remains a lightly explored issue.
Interaction with immigration timing: The decision reiterates that a Bridging A visa holder will be a foreign person for SPD purposes (see the Tribunal's reference to Van der Zanden and Guimaraes). The precise treatment where visa processing timelines are unusual, or where an imminent grant of residency is demonstrably certain before settlement, may give rise to future disputes; this decision suggests later grant of residency after settlement does not create remission grounds.
Remission of market component of interest: The Tribunal reiterated the strong presumption against remission of the market component. The circumstances in which that component might be remitted remain narrow and untested in many factual combinations.
Practitioners advising on surcharge purchaser duty disputes should carefully address the steps taken by taxpayers and those acting on their behalf to ensure accurate declarations; where errors occur, early, documented, detailed cooperation with Revenue NSW, together with demonstrable attempts to obtain independent advice and prompt disclosure, remain the best prospects for mitigation of penalties and the premium component of interest.
Judgment (12 paragraphs)
[1]
The applicant
The applicant relied upon Mr Denton to act on her behalf in completing the Declaration Form and communicating with the conveyancer. That reliance was appropriate, and understandable, given their relationship and the applicant's limited English skills. It does not demonstrate that she failed to exercise reasonable care, but it requires an examination of what was done by her husband.
The relevant enquiry therefore moves to the actions of Mr Denton.
[2]
Oral evidence of Mr Denton at the hearing
The applicant was represented at the hearing by her husband with the Tribunal's permission.
The Tribunal requested Mr Denton to give sworn oral evidence at the hearing and be cross-examined. The respondent did not object to this course.
Mr Denton told the Tribunal that he communicated with the conveyancer by phone and email, on behalf of himself and his wife. He said he did not meet with the conveyancer in person. He said that the conveyancer sent the Declaration Forms to him, but just told him to fill them out and return the forms to her. He said that the conveyancer did not mention anything else about SPD, or visa status, or any possible SPD liability. He confirmed in cross-examination by the respondent that he did not ask the conveyancer any questions about the forms.
Mr Denton said that he looked at information on the Revenue NSW website before he completed the forms for himself and his wife to sign. He said that he had clicked on the link in the Declaration Form, but it just took him to the home page on the Revenue NSW website, so he had to dig around a bit to find the information.
He said that he couldn't remember exactly what he read on the website, but he spent some time reading through it. After doing so, he was satisfied that there was nothing he read that caused him to believe that they would be liable to any SPD.
On cross-examination by the respondent's representative, Mr Denton said:
1. that he had no record of what he read on the website (e.g. no written notes, and no print-outs);
2. he didn't recall reading anything about a bridging visa; and
3. he had not contacted Revenue NSW for assistance, because "he didn't think there was any problem".
[3]
Relevant findings regarding Mr Denton
I found Mr Denton to be an honest and reliable witness. Having regard to his evidence, and the materials before me, I find as follows:
Mr Denton is not a lawyer, nor does he have any legal training.
He read through information on the Revenue NSW website at the time he was in the process of completing the forms for himself and his wife. I accept that it is not now possible to prove that fact with certainty, but I find that to be the case on the balance of probabilities.
The "Purchaser/Transferee Declaration - Explanatory Notes and Supporting Evidence" (Explanatory Notes) was read by Mr Denton, although perhaps not in its entirety.
I accept that Mr Denton did not recall reading anything about a bridging visa. I note that the version of the Explanatory Notes at the relevant time on the website was as at R3 at Tab 3 (June 2019, OOA 076). The text of that version:
1. contained the statutory definition for "ordinarily in Australia";
2. did not refer to a "temporary visa", or a "bridging visa";
3. did not include the table which was in the later version of the Explanatory Notes; and
4. did not direct the reader to any other information published by the Commissioner, specifically Ruling G009 "Definition of a foreign person" (R3 - Tab 4) which has been referred to in the respondent's submissions.
He formed the view, after his reading of the material, that no liability for SPD arose.
I find that Mr Denton, based on the above, and having regard to his lack of legal expertise, made diligent efforts to read and understand the material. He also understood that Revenue NSW would be assessing the form.
However, I also find as follows:
1. Mr Denton engaged a conveyancer;
2. The conveyancer sent the Declaration Forms to Mr Denton to be completed, without any specific instructions;
3. Mr Denton completed the visa information on the Declaration Form for the applicant incorrectly, stating that the applicant had a "sub-class 189" visa (i.e. a permanent resident visa);
4. Mr Denton did not send a copy of the visas to the conveyancer; and
5. Mr Denton did not ask questions of the conveyancer or confirm the position.
I also note that Part B of the Declaration Forms of both Mr and Mrs Denton under "Type of land acquired" were completed as "House - owner occupied" rather than "Vacant land - residential". I understood from the respondent's submissions that it was vacant land that was purchased, but nothing of particular importance turns on this.
[4]
The conveyancer
There is no evidence regarding the actions taken by the conveyancer, other than the evidence provided by Mr Denton which establishes that no specific assistance was provided (or sought) in respect of the completion of the form.
[5]
Conclusion on the discretion in s 27(3)(a)
I have found above that the applicant relied on Mr Denton, and that Mr Denton did not take reasonable care. There is no evidence to conclude that the conveyancer took reasonable care, but the onus is on the taxpayer. In any event, it is relatively clear that no specific advice was requested, or given. Even if the conveyancer had exercised reasonable care, it does not require the exercise of the discretion. It is dependent on the totality of all actions of the parties, when considered together. As stated in Nhem v Chief Commissioner of State Revenue [2024] NSWCATAD 9 (Nhem) (at [63]-[64])
An additional justification for a refusal to exercise the discretion in those circumstances is obtained by having regard to the combined result of the behaviour (the acts and omissions) of the taxpayer and the person acting for them. If that combined result is that the Chief Commissioner is unable to make a proper assessment of duty because the relevant behaviour includes a failure to take reasonable care (as here) or a failure to provide complete and accurate information (as here) then, whether or not it was the intention of either of the relevant parties to mislead (and there was none established here), the Tribunal may be justified in refusing to interfere with the Chief Commissioner's decision not to exercise the section 27 (3) discretion.
As the precondition has not been satisfied, there is no basis upon which to exercise a discretion to reduce the penalties to nil under s 27(3)(a).
[6]
Caused solely by circumstances outside the taxpayer's control - s 27(3)(b)
I agree with the respondent's submissions and find that there is no basis upon which to exercise my discretion to reduce the penalties to nil under s 27(3)(b) of the TA Act.
It is clear that the liability to SPD did not arise because it was caused solely by factors outside the applicant's control.
[7]
Section 33
Section 33 of the TA Act provides a discretion to remit penalty tax if the respondent considers it appropriate. It is a broad and unfettered discretion: Hirere Pty Ltd v Chief Commissioner of State Revenue (NSW) (2004) 57 ATR 476 at [24]-[25], [31].
However, in Bayton Cleaning Co Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657; (2019) 109 ATR 879, Ward CJ held at [301] that she did not consider that the general discretion in s 33 should be exercised:
… where there has been a finding that reasonable care has not been established and in the absence of some special circumstance to warrant the exercise of the discretion notwithstanding the absence of a finding of reasonable care.
This position was reinforced by the Court of Appeal in Chief Commissioner of State Revenue v Downer EDI Engineering Pty Ltd (2020) 103 NSWLR 772 at [149]-[150].
I do not find that there are any "special circumstances" that justify a remission of penalty in this case.
The alleged obligations of the respondent put by the applicant have been discussed above. I accept that the permanent residence visa, if issued before the transaction, would have led to no liability to SPD. I also accept that if the applicant had been aware of the correct position, the property may not have been purchased in joint names. However, I do not agree that the intent of the legislation is at odds with the position that applied at the relevant time, notwithstanding Ms Denton was later issued her permanent residency visa.
[8]
Interest
Interest may be remitted pursuant to s 25 of the TA Act.
As set out above, s 25 was amended on 1 February 2024. The respondent has confirmed that no guidelines have been issued pursuant to the amended s 25(2) of the TA Act and so there is no relevant change at the present time in the nature of the discretion conferred by s 25: see Golden Age at [24].
[9]
Interest - Market rate component
The market rate component is intended to compensate the Commissioner for not having the benefit of the tax payment from the time it was due, and so approximates the ordinary lending interest rates. It is a component that could rarely, if ever, be waived as otherwise tax would be paid at a devalued amount thereby discriminating against taxpayers who meet their obligations on time. See Golden Age at [101], Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [2004] NSWADTAP 19 (Incise Technologies) and the Commissioner's Practice note CPN 024.
Having regard to the facts set out above, I agree with the respondent's submissions that there are no exceptional circumstances that would justify any remission of the market rate component.
[10]
Interest - Premium component
The "premium component" of interest was considered by Richmond J in Golden Age who said at [102] ff:
102 In my view it is necessary to approach the remission question by recognising that the premium component is penal in nature and serves the purpose of both imposing a penalty and deterring taxpayers from delaying payment of duty in what is essentially a self-assessment regime. Consequently, the culpability of the taxpayer in failing to pay the duty liability by the due date is an important matter in the exercise of the discretion. I do not accept the Commissioner's submission that it is a penalty at the "low end" of the scale. Depending upon the period of the delay in payment, the penalty arising from the premium component can be very significant as it was in the present case (being 24% of the duty assessed on the premium).
103 In Incise Technologies, the Appeal Panel identified (reflecting a submission made by the Commissioner in that case) four cumulative criteria which are relevant to the exercise of the discretion under s 25:
(1) All principal tax that is owing and not in dispute has been fully paid;
(2) There has been cooperation by the taxpayer in providing relevant information to the Commissioner so as to enable the Commissioner to issue assessments;
(3) Such cooperation has occurred prior to any investigation being commenced by the Commissioner or, at the very least, within a reasonable time after the request for information had been made by the Commissioner; and
(4) There has been no wilful default by the taxpayer in not paying tax on time.
104 The Appeal Panel noted in Incise Technologies at [63] that the first of these criteria could be clarified to be "all principal tax that has been assessed and is not in dispute has been fully paid at the time of the request for remission of interest" and that while they were all relevant and appropriate matters for consideration, they were not exhaustive. That the four criteria are not exhaustive has been confirmed in subsequent cases, eg. Antegra Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 107 at [179] and Chief Commissioner of State Revenue v E Group Security Pty Ltd (No 2) [2022] NSWCA 259 at [105]-[106].
105 The Court was referred to the Commissioner's guidelines on interest and penalty tax appearing on the Revenue NSW website, which state:
The premium rate of interest may be reduced if there is evidence you took reasonable care, or made a voluntary disclosure before the commencement of an investigation. However, for the purpose of payroll tax, the premium rate of interest is not reduced.
…
When determining whether reasonable care was taken we'll consider whether you:
● Kept complete and accurate records
● Made a diligent effort to understand and comply with the law;
● Sought expert advice on uncertain or complex matters;
● Were honest in your dealings with us.
We'll also consider your:
● Understanding of the law;
● Commercial experience;
● Access to expert advice;
Meeting one or more of these criteria does not necessarily mean that reasonable care has been taken. All factors leading to the tax default are taken into consideration.
106 It was accepted in Adams Bidco at [158]-[162] that whether the taxpayer has taken reasonable care to comply with the taxation law is a relevant consideration for the exercise of the discretion under s 25; see also Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773 at [86]; Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657 at [301]. I agree that whether the taxpayer took reasonable care is relevant to the remission of the premium component under s 25. In particular, it is necessary to consider whether there are factors which mitigate the taxpayer's behaviour in failing to pay its tax liability on time and, in this regard, it is necessary to consider the steps (if any) taken by the taxpayer to comply with the taxation law, whether those steps were reasonable and the explanation for why, despite those reasonable steps, the tax default occurred.
[11]
Consideration of Shah and Galle
I should address the cases of Shah and Galle as these have been specifically raised by the applicant.
In Shah, the Tribunal also discussed the relevant criteria in Incise Technologies in considering whether the applicant had exercised "reasonable care", in both consideration of interest and penalty remission, citing the 4 criteria in Incise Technologies and stating as follows (at [73]):
73. …While not determinative, I also note that the Applicant's English is limited and he relied on a conveyancing lawyer to assist him with the purchase. While I accept the Respondent's submission that there is little evidence of the communications which took place between the conveyancer and the Applicant, I accept the Applicant's evidence that he was not advised that he may have a liability to surcharge purchaser duty. I accept that he genuinely believed that he was a permanent resident. The Respondent pointed the Tribunal to that part of the Declaration signed by the Applicant which directs him to review the Respondent's website for information about surcharge purchaser duty before completing the Declaration submitting that he could have done so and become aware of his liability to surcharge purchaser duty. However on the face of the Declaration (which the Applicant would have had difficulty reading in any event) there is no explanation of the term "ordinarily resident" or to the fact that temporary visa holders will be considered foreign persons. In all of the circumstances, I consider that the Applicant has demonstrated that he took reasonable care within the meaning of Incise Technologies and that it is appropriate to remit the premium component of the interest in full.
I find that the facts in that case are sufficiently distinguishable. In this case, there was no reason for Mr Denton to believe that his wife was a permanent resident at the time the form was completed. He was clearly aware that she was not. It was the totality of the circumstances in Shah, not just the relevant information published by Revenue NSW and the failure of a conveyancer to assist, that led to the decision in that case.
In Galle, as noted by the respondent, the Chief Commissioner determined to remit penalty and interest when considering the taxpayer's objection, and the question of whether interest and penalty should be remitted was not the subject of review by the Tribunal and was never considered. That decision is not a precedent for the Tribunal to remit penalty and interest in the present case.
[12]
Orders
I make the following orders.
1. The decision under review is affirmed.
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 25 July 2024
The Tribunal has jurisdiction to hear this matter: s 96 of the Taxation Administration Act 1996 (NSW) (TA Act), s 9 of the Administrative Decisions Review Act 1997 (NSW) (ADR Act) and s 30 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act).
The Tribunal's task is to decide what the correct and preferable decision is having regard to the material before it at the time of the hearing: ADR Act, s 63(1).
The applicant bears the onus of proof: TA Act, s 100(3). That means she must prove all matters necessary for the Tribunal to answer the statutory questions in her favour: Cornish Investments Pty Ltd v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [36]. The standard of proof is the balance of probabilities.
Applicant's submissions
In summary, the applicant submits as follows:
1. It is unfair that she should be assessed for interest and penalties where it was not clear on the face of the documents the specific requirements in order to satisfy the tests of being a "foreign resident";
2. She had applied for Australian Permanent Residency more than 12 months prior to the purchase of the property, had received a bridging visa and was granted permanent residence shortly after settlement. The land was purchased for the purpose of building her home which she intended to live in permanently;
3. The purchase was not a speculative housing purchase by a foreign investor, or contrary to the interests of genuine legal immigrants. Indeed, for all intents and purposes, the respondent applied the law in a way that penalises those very genuine immigrants (the applicant now being a permanent resident);
4. If the applicant and her husband had been aware of the liability to SPD, she would not have become a joint tenant purchaser; rather, the property would have been purchased solely in her husband's name with no liability for SPD arising;
5. There was a lack of clarity and information on the "poorly designed" Purchaser/Transferee Declaration Form:
1. The term "a person who is ordinarily resident in Australia" was by its nature ambiguous and read as a statement of plain English regather than a legal definition. It was not highlighted in bold, nor underlined or in any way prefixed to suggest there was a legal definition which needs to be referred to or legally interpreted.
2. While there was further explanation via the website link, it was convoluted, required multiple clicks through several pages and a level of interpretation which was very difficult to follow.
1. There was no action by the respondent to assess the visa information provided (i.e. the visa number) despite lodgment of the form. The information on the main website link under the hearing "Declaring your foreign status" stated:
Declaring your foreign status
When you acquire residential-related property in NSW, you must complete a purchaser/transferee declaration form and provide supporting documents so we can determine if you must pay surcharge purchaser duty.
Accordingly, having provided the information on the Revenue NSW form, it was the applicant's expectation that the information would be checked, and any misinterpretation would be clarified and pointed out during the submission process.
1. The applicant submitted: "Surely there is a requirement to make reasonable efforts to assist taxpayers understand and meet their obligations and make assessments based on all of the information provided."
The applicant pointed to the cases of Galle v Chief Commissioner of State Revenue [2022] NSWCATAD 285 (Galle) and Shah v Chief Commissioner of State Revenue [2022] NSWCATAD 311 (Shah) and said that in those cases, which were relevantly similar, interest and penalties had either been remitted or not imposed.
The decision under review
The Tribunal's role is to conduct an administrative review of the relevant "decision"; in this case, it is the original decision of 18 August 2023 because that "has been the subject of an objection": s 96(1) of the TA Act.
The applicant, who bears the onus of proof, no longer disputes the assessment of SPD. The assessment to SPD is therefore affirmed to be the correct and preferable decision.
For completeness, the Tribunal has previously held that an individual who holds a bridging visa (which I observe may have no identifiable "expiry date", in the case of a Bridging A visa) is, at that particular time, a foreign person for the purposes of SPD: see Van der Zanden v Chief Commissioner of State Revenue [2022] NSWCATAD 283 and (more recently), Guimaraes v Chief Commissioner of State Revenue [2024] NSWCATAD 95. This is regardless of meeting the 200 day test in s 5(1)(a) of the FATA.
The applicant submits that the Tribunal should remit the following:
1. the penalty of $3,760 (which included a reduction from 25% to 20% under s 29 of the TA Act); and
2. interest of $4,263.69 (imposed at the market and premium rate).
Reasonable care - s 27(3)(a)
It is therefore necessary to first look at the relevant facts relating to the actions of each of these persons, and then to ascertain whether they took "reasonable care to comply with the taxation law". This requires a determination of whether the person exercised the care that a reasonable person would be likely to have exercised in the circumstances of that person (including in respect of enquiries made and advice sought or received): see Qualweld Australia Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 227 at [95]; RVO Enterprises Pty Ltd v Chief Commissioner of State Revenue [2004] NSWADT 64 at [23]; Levitch Design Associates Pty Ltd ATF Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 21 (Levitch) at [113]; also the instructive Supreme Court decision of Richmond J in Golden Age & Hannas the Rocks v Chief Commissioner of State Revenue [2024] NSWSC 249 (Golden Age) at [70] and [111].
The decision under review is affirmed; no remission of penalty tax or interest was granted.
Nonetheless, I find that a reasonable person in the circumstances of Mr Denton (with no legal training, and completing formal documentation relating to a purchase with significant duty potentially payable, and knowing the status of his wife's current visa) would have:
1. completed the visa information correctly, such that it did not refer to a "sub-class 189" (permanent resident) visa;
2. sent that correct information to the conveyancer, together with copies of the relevant visas; and
3. requested the conveyancer to confirm that his understanding was correct in respect of SPD.
There is no duty on the Commissioner to warn a taxpayer regarding their liability to SPD. It is a self-assessment system. The information issued at the time by Revenue NSW may have been less than helpful (and has now been amended), and the guidance on the form may have caused an impression that it was not a self-assessment system, but it is.
Ultimately, Mr Denton did not complete the form accurately which - if done - may have triggered a line of enquiry by his conveyancer to confirm the status of his wife's visa. And he did not request any confirmation specifically from the conveyancer. In Levitch, the Tribunal stated (at [113]) in respect of taking advice:
… Taking advice on the operation of the relevant provisions can amount to reasonable care for the purposes of s 27: The Smith's Snackfood Case at [96-100]. In my view, simply hiring or relying on an accounting to prepare returns or assuming that an adviser would review returns, is not of itself a "taking advice" on the operation of relevant provisions: cf Snowy Hydro Ltd v Commissioner of State Revenue [2010] VSC 221; (2010 79 ATR 118 at [81-82]; on appeal, Commissioner of State Revenue (Vic) v Snowy Hydro Ltd [2012] BSCA 145 at [170], [171].
Accordingly, I find that Mr Denton did not exercise reasonable care.
In respect of criteria 1 in Incise Technologies, Mr Denton advised the Tribunal that a payment plan for the SPD had been agreed with the respondent. At the hearing, he confirmed that payments had been made, and said that it was "almost all paid". There was no suggestion that payments had not been met in accordance with those arrangements. In these circumstances, although there may have technically been amounts of principal tax which were still "owing", they were not yet "due" (see Coles Myer Finance Ltd v Commissioner of State Revenue [1998] VSC 184 at [22]). In these circumstances (and noting that the principal tax amount was still "in dispute" until recently conceded), I find that this criteria was satisfied in substance.
In respect of criteria 2, 3 and 4 in Incise Technologies, I find that there was cooperation by the applicant in providing relevant information to the Commissioner so as to enable the Commissioner to issue assessments; such cooperation occurred within a reasonable time after the request for information had been made by the Commissioner; and there has been no "wilful" default by the applicant in not paying tax on time (per Golden Age at [108]). The co-operation was acknowledged in writing by the respondent, as stated above in these reasons at paragraph 38 above.
However, as found above, Mr Denton did not exercise reasonable care. Accordingly, I agree with the submissions of the respondent and, based on my findings above that no discretion has arisen under s 27(3), there are no relevant "special circumstances". Accordingly, I do not propose to exercise the discretion to remit the premium rate of interest under s 25 of the TA Act.