1. On 28 March 2012, the Applicant returned the section 82 Notice providing details of rental periods for the property; 2. On 29 March 2012, the Respondent issued a Land Tax Assessment Notice (the Assessment) to the Applicant comprising: 1. Land Tax - $19,396.87 2. Penalty Tax at 50% - $ 9,698.54 3. Interest - $15,819.23

1. The Applicant paid the land tax, penalty tax and interest;
2. On 21 May 2012 the Applicant objected to the Assessment; and
3. On 27 November 2012 the Respondent disallowed the objection.

1. The Applicant provided the Tribunal with a copy of a letter dated 16 April 2013 in reply to the Respondent's Statement of Facts and Contentions and a document entitled 'Corrections to my Objection Letter dated 24/05/2012' ( both documents were identified as Exhibit A1). Ms Katavic provided the Tribunal with a Certificate of Rates, Land Tax & Other Charges; Application (Exhibit R1); a document she had prepared entitled 'Chronology' which contained Agreed Facts and Contentions; and the Respondent's written Submissions (Exhibit R2).

1. The Applicant expressed her concerns during the hearing that the Respondent had, in Exhibit R2 which was filed during the hearing, referred to case law, namely Moore Park Gardens Management Pty Ltd v Chief Commissioner of State Revenue[1] and A Plus Plumbing and Building Services Pty Ltd & The Commissioner for ACT Revenue (Administrative Review)[2]. The Applicant submitted that these authorities were in addition to the cases identified by the Respondent in its List of Authorities (the List) filed on 24 April 2013.

1. The Applicant wrote to the Tribunal on 30 April 2013 stating that she understood that the Respondent had agreed, on 23 March 2012 at a Directions Hearing, to include "a list of authorities of any cases which are contrary to those the Commissioner relies on" as she was self represented and unfamiliar with the structure of legal search engines. The Applicant said when she received the List she had to then spend the weekend before the hearing searching for and locating case law relevant to her application. This is a prudent approach for any litigant to adopt. The Applicant notified the Tribunal on 30 April 2013 that, at that time, she would be relying on Aston and Commissioner for ACT Revenue.[3]

1. It is clear from the Tribunal's Notation on 23 March 2012 that what was asked was that the Respondent include in its List of Authorities a citation of cases, if any, contrary to those to be relied on by the Respondent. The Tribunal will return to the authorities relied on by the parties later in this Decision.

"I claim that I meet every criteria for the penalty tax to be waived.......

In support of waiving the penalty tax, I claim that I:

- took all reasonable care to comply with the law;

- was under exceptional circumstances (social stressors & isolation to overcome difficult background)

- managed the rental of the property to the best of my ability at the time (limited by financial literacy & social networks/connections)

1. The Applicant set out in her Statement of Facts and Contentions the bases for her claims in the preceding paragraph. She stated that - "the Commissioner can remit all of the penalty tax payable as I have taken reasonable steps to mitigate the circumstances that resulted in liability for penalty tax." She referred to and relied upon the ACT Revenue - Revenue Circular GEN006 at page 5, paragraph 24 which states that '(a)(i) the commissioner may remit an amount of penalty tax in whole or part if satisfied that the person has taken reasonable steps to mitigate ...the circumstances that resulted in the liability; ....'.

1. Ms Katavic submitted, and the Tribunal agrees, that the issue for determination is whether the circumstances relied on by the Applicant support the Tribunal determining that another decision in relation to penalty tax and interest should be made.

1. The Rates and Land Tax Act 1926 (RLT Act) was in force prior to 1 July 2004. The following sections are relevant to the decision under review:

(1) Land tax at the appropriate rate mentioned in subsection (2) is imposed for a quarter for each parcel of rateable land that is not exempt from land tax.

22BB Commissioner must be told if land leased for residential purposes is rented

_(1) A person who becomes the owner of a parcel of land that is leased for residential purposes, and becomes or continues to be rented by a tenant on the change of ownership, must tell the commissioner in writing within 30 days - _

(a) that the parcel became or continued to be rented; and

(2) The owner of a parcel of land that is leased for residential purposes must tell the commissioner in writing within 30 days if the parcel becomes rented by a tenant.

(3) Subsections (1) and (2) do not apply to a company.

(a) fails to give any information as required by this Act; or

(b) provides any such information, whether orally or in writing, that is false or misleading in a material particular;

the owner is liable to pay, as a penalty, an additional amount equal to double the amount of any land tax payable in relation to that parcel of land.

(2) The commissioner shall assess the amount of penalty tax payable by an owner of a parcel of land under subsection (1) and shall, as soon as practicable after making the assessment, give the owner written notice of the assessment and of the due date for payment of the penalty tax.

22EC Refund or remission of penalty tax

If the commissioner is satisfied that it is fair and reasonable that all or part of any penalty tax payable or paid in relation to a parcel of land should be remitted or refunded, the commissioner may remit or refund the relevant amount to the owner of the parcel of land.

1. After the RLTA was repealed on 1 July 2004, the Land Tax Act 2004 (LTA) commenced. Part 7 of the LTA deals with the transitional issues of tax owing under the RLTA but not paid. Land tax assessed under the RLTA is taken to be payable under the LTA. Section 48 of the LTA Part 7 (since repealed) stated:
   1. Land tax payable under repealed Act

(a) land tax (including penalty tax and interest) was

(2) The land tax is taken to be payable under this Act.

1. The following sections of the LTA are also relevant to the decision under review:
   1. Imposition of land tax

(1) Land tax at the appropriate rate is imposed for a quarter on each

(b) residential land owned by a corporation or trustee; or

1. Commissioner to be told if residential land rented

_(1) This section applies in relation to a parcel of land that - _

_(2) A relevant person must tell the commissioner, in writing - _

Note 1 If a form is approved under the Taxation Administration Act 1999, s 139C, the form must be used.

Note 2 It is an offence to fail to notify the commissioner under this section (see Taxation Administration Act 1999, s 67 (2)).

Note 3 It is also an offence to knowingly avoid paying, or disclosing a liability to pay, part or all of an amount of tax (see Taxation Administration Act 1999, s 65 (1)).

1. Where a land owner has failed, in accordance with section 14 of the LTA, to disclose that the land is rented, then Part 3 of the LTA deals with enforcement. Section 19A reads:

19A Interest and penalty tax payable on land tax if no disclosure

(a) land tax is imposed on a parcel of rateable land under section 9 (1) (a); and

(b) the owner of the parcel of land fails to comply with section 14 (Commissioner to be told if residential land rented).

(2) The owner is liable to pay interest on the amount of land tax from the

end of 30 days after the 1st day of the 1st quarter for which the tax is

_(3) Interest on the amount of land tax is worked out - _

(a) for each calendar month that the amount is payable; and

(c) at the interest rate applying to that day; and

(d) on the total amount of land tax that is payable on a day when the interest is worked out.

Note The Minister may determine an interest rate for this section under the Taxation Administration Act, s 139.

(4) For subsection (3) (a), if an amount of land tax is payable for part of a

calendar month, interest is payable for the whole month.

(5) The Taxation Administration Act, division 5.2 (Penalty tax) applies to

(a) the owner's failure to comply with section 14 were a tax default; and

(b) a reference to interest under division 5.1 were a reference to interest under this section; and

(c) a reference to the amount of tax unpaid were a reference to the amount of land tax payable.

(6) This section applies to land tax imposed before or after the

1. Division 5.2 of the TAA applies to the land owner as if the owner's failure to comply with section 14 of the TAA is a tax default.

1. The following sections of the TAA are relevant to the decision under review:

1. Penalty tax in relation to certain tax defaults

(1) If a tax default happens, the taxpayer is liable to pay penalty tax in addition to the amount of tax unpaid.

Note A taxpayer may also be liable to pay penalty tax under the Land Tax Act 2004, s 19A (5) (Interest and penalty tax payable on land tax if no disclosure).

(2) Penalty tax imposed under this division is in addition to interest.

_(3) Penalty tax is not payable in relation to a tax default that consists of a failure to pay - _

(b) penalty tax previously imposed under this division.

(1) The amount of penalty tax payable in relation to a tax default is 25% of the amount of tax unpaid, subject to this division.

(2) The amount of penalty tax payable in relation to a tax default is 50% of the amount of tax unpaid if the commissioner is satisfied that the tax default was caused wholly or partly by a failure by the taxpayer (or a person acting on behalf of the taxpayer) to take reasonable care to fulfil the taxpayer's obligations under a tax law.

(3) Subsection (2) does not apply if the tax payer satisfies the commissioner that the taxpayer (or a person acting on behalf of the taxpayer) had a reasonable excuse for the failure.

(4) Subsections (2) and (3) apply to a tax default that happened before their commencement in the same way as they apply to a tax default that happened after their commencement.

(5) The amount of penalty tax payable in relation to a tax default is 75% of the amount of tax unpaid if the commissioner is satisfied that the tax default was caused wholly or partly by the intentional disregard by the taxpayer (or a person acting on behalf of the taxpayer) of a tax law.

_(6) No penalty tax is payable in relation to a tax default if the commissioner is satisfied that - _

(a) the taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with the tax law; or

(b) the tax default happened solely because of circumstances beyond the taxpayer's control (or if a person acted on behalf of the taxpayer, because of circumstances beyond either the person's or the taxpayer's control) but not amounting to financial incapacity.

Note The commissioner's decision to impose penalty tax is an internally reviewable decision (see s 107, def internally reviewable decision), and the commissioner must give an internal review notice to the taxpayer (see s 107B).

1. Reduction in penalty tax for voluntary disclosure

The amount of penalty tax determined under section 31 is reduced by 80% if, before the commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out, the taxpayer discloses to the commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.

1. Reduction in penalty tax for disclosure before investigation

The amount of penalty tax determined under section 31 is reduced by 20% if, after the commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out and before it is begun, the taxpayer discloses to the commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.

_The commissioner may remit all or part of an amount of penalty tax payable by a person if satisfied that - _

(ii) the circumstances that resulted in the liability

(b) it would be fair and reasonable to remit all or part of

Note The commissioner's decision to refuse to remit penalty tax payable by a person is an internally reviewable decision (see s 107, def internally reviewable decision), and the commissioner must give an internal review notice to the person (see s 107B).

1. Section 108A of the TAA provides that the Tribunal may review 'reviewable decisions'. Under section 68 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) when conducting such a review the Tribunal has all the powers of the original decision maker. Section 107A of the TAA defines a 'reviewable' decision. This includes decisions made pursuant to section 31 of the TAA to impose penalty tax and a decision under section 37 not to remit penalty tax.

1. There is no right to apply for a review by the original decision maker or by the Tribunal in relation to the failure to reduce penalty tax under sections 32 and 33 of the TAA. Those sections of the TAA operate to reduce the assessment under section 31 where the facts on which those sections are predicated exist, and this is reflected in the assessment which is issued.

1. The Tribunal has considered the relevant provisions in the LTA and the TAA. Decisions under the TAA which may be internally reviewed and then reviewed by ACAT do not include a decision to remit interest pursuant to section 29AA TAA.

1. A decision to impose interest under section19 or section 19A of the LTA cannot be reviewed by ACAT because it is not prescribed by section 38 of the LTA nor is it otherwise reviewable pursuant to the provisions of section 107A or schedule 1.2 of the TAA.

1. The Tribunal is satisfied that neither the imposition of interest, nor its remission can be reviewed by the Tribunal.

1. The Applicant set out in her Statement of Facts and Contentions the grounds on which she relied for her position that the penalty tax and interest she had paid should be remitted. She also made submissions at the hearing in relation to Exhibit R2.

1. She told the Tribunal that she did not know about Land Tax until she had sold the property. She said she had taken reasonable care and that is a ground for waiving penalty tax and interest. She said that a penalty tax of 50% was based on the taxpayer not taking such care - and was not applicable to her.

1. In relation to paragraph 49 of the Respondent's submissions, namely - "_The applicant contends that had she been aware of her land tax obligation she would have set the rental for the property higher. The respondent contends that this is not a relevant factor and relies upon the authority (_Moore Park Gardens Management Pty Ltd v Chief Commissioner of State Revenue[4]) in support of that contention." - the Applicant said that while she had rented property as a tenant for around 12 years she had not come across land tax. The property was her first property purchase and it was her first time for renting as a landlord. Her background was that her family were not investors and did not use accountants. She did not mix in financial circles or associate with investors. She had had no exposure to financial literacy or education.

1. After she purchased the property in May 2001 she lived in it until 30 January 2002 at which time she commenced studying Architecture full time at the University of Canberra. She rented the property to tenants and managed the rental herself. She moved to reside in accommodation closer to the university.

1. She conceded that she may have been naive about land tax. She said she had been excited to buy her first home and during the time she resided at the property she received rates notices and was familiar with them. Her way of dealing with incoming mail and accompanying brochures was that she only opened mail addressed to her and when she looked at the contents of the envelopes including her rates notices she would seek out the correspondence addressed to her and act on that. She discarded any brochures included with the correspondence. In her Statement of Facts and Contentions she referred to the 'impersonal nature of ACT Revenue's pamphlets'[5]. She said she did not consider her approach risky, describing it as 'the way I handled my affairs.'

1. When she decided to rent out the property in 2002, she said, she did everything by the book in regards to lodging the bond with the Office of Rental Bonds. She downloaded a form of lease from an ACT Government website. She sought advice from a Queanbeyan accountant to establish her personal tax return format with a rental property supplement. She knew there would be a taxation impact from the rental income so she said she asked the accountant to set her up so that the tax obligations would be attended to in her future tax returns. Until 2007, she completed her own e-tax returns using the format established by the accountant. From 2008, her income tax returns were completed by tax accountants.

1. The Applicant told the Tribunal that she set the rent at a rate which covered her costs plus mortgage repayments and that the rent was about $50 or $60 below market rent. Had she known of her land tax obligations she would have been in the position to raise the asking rent by $40 a week to cover the cost of land tax and still be asking below market rent. She said "I did not intentionally reneg[e] on any requirements to pay Land Tax, and was instead very financially naive."[6]

1. Since becoming aware of the liability to pay land tax in 2012 she said she has become more financially literate and knowledgeable.

1. The Applicant referred to and relied on information published in two Revenue Circulars, 'Revenue Circular GEN006 ' and 'Revenue Circular GEN009' (Exhibit A7). She referred to and relied on the following extracts in Revenue Circular GEN006

i. Amounts of Penalty Tax payable in relation to tax default[7]:

1. 50 percent of the amount of tax unpaid if the Commissioner is satisfied that the tax default was caused wholly or partly by a failure of the tax payer (or a person acting on behalf of the tax payer) to take reasonable care to fulfil the taxpayer's obligations under a tax law - unless the tax payer satisfied the Commissioner that the tax payer (or person acting on the behalf of the taxpayer) had a reasonable excuse for the failure (sections 31(2) and (3) The Taxation Administration Act 1999 (TAA).)

1. When penalty tax is not payable in relation to tax default[8]:
   1. If the Commissioner is satisfied that the taxpayer (or a person acting on behalf of the tax payer) took reasonable steps to comply with the tax law (section 31(6)(a) TAA);
   2. If the Commissioner is satisfied that the tax default happened solely because of circumstances beyond the taxpayer's control (or if a person acted on behalf of the tax payer, because of circumstances beyond either person's or the taxpayer's control) but not amounting to financial incapacity (section 31(6)(b) TAA).
2. Remission of Penalty Tax[9]
   1. The Commissioner may, under section 37 TAA remit an amount of penalty tax in whole or in part if satisfied that :
      1. Either -
         1. the person has taken reasonable steps to mitigate, or to mitigate the effects of, the circumstances that resulted in the liability for penalty tax; or
         2. the circumstances that resulted in the liability for penalty tax were exceptional: and
      2. It would be fair and reasonable to remit all or part of the penalty tax.

iv. What will be considered reasonable includes[10]:

1. the nature and extent of the taxpayer's culpability;
2. the complexity of the matter giving rise to the taxpayer's liability;

1. the reasons for the taxpayer's failure to meet their tax obligations, including the extent to which they attempted to comply and the processes instituted by them to ensure compliance with tax laws;

1. the tax payer's previous failure (if any) to comply with tax laws, including repealed tax laws; and
2. if an investigation has been or is being conducted into the tax payer's tax liability - the tax payer's level of co-operation with the Commissioner.

The Commissioner will not impose penalty tax for a tax default in the following circumstances:

(a) circumstances beyond the taxpayer's control. Mere financial incapacity to pay a tax liability does not constitute circumstances beyond the tax payer's control; and

(b) taking reasonable care. In determining reasonable care, the Commissioner may have regard to whether the taxpayer, in appropriate circumstances:

1. kept complete and accurate records;
2. made diligent efforts to understand and comply with the law, and sought expert advice on uncertain or complex matters;
3. was honest and open in their dealings with the ACT Revenue Office; and
4. put in place appropriate processes to ensure compliance with tax laws.

The Commissioner will not consider remitting penalty tax in the following circumstances:

(i) where the tax payer has deliberately committed a tax default in the form of fraud or evasion of tax, or knowingly misled the Commissioner or caused the Commissioner to be misled about the taxpayer's tax liability, including by deliberately omitting information to the Commissioner; or

(ii) where the taxpayer has intentionally disregarded their obligations under tax laws; or

1. Annexed to this circular is an Attachment of examples of circumstances 'beyond the taxpayer's control'; of 'where the taxpayer took reasonable care' and of 'where the tax payer did not take reasonable care.'

1. The Applicant submitted that her situation fitted within the guidelines and example in Revenue Circular GEN006, that she did take reasonable care and that her situation did not fit into the guidelines and example relating to not taking reasonable care.

1. She submitted that she had kept excellent records; she had a solicitor act for her on the purchase of the property and she saw three different accountants. She instructed them to prepare her personal tax return including Supplement for her rented property, and to let her know of any deductions or payments due. She supplied the accountants, whom she regarded as expert advisers, with accurate records which she had carefully tabled into Excel spreadsheets, itemising all income and expenditure. In 2002, her accountant set up her books for first year of rental and alerted her to the need for a depreciation schedule and set one up for her. She followed their advice and template for the next five years. She used two more accountants over the next 8 years and followed their advice.

1. The Applicant further submitted that, given her background, she did not know any different. Her family did not use accountants. She thought it was a big deal involving accountants and that her tax obligation was discharged.

1. The Applicant conceded, looking back now, that her management of the property was based on some degree of ignorance but emphasised:

1. that the fact that she got into this situation with land tax shows that she had no idea about it;
2. that her ignorance of the tax requirements was understandable given her personal and exceptional circumstances;

1. that when she rented out the property she was single-mindedly aiming to achieve some level of success by studying full time for a tertiary qualification while working part-time, and that during this time she was without a support and guidance network; the focus of her energy was on the demands of study and creating a new professional life for herself and she was not able to focus on financial literacy;

1. that her actions were the actions of somebody who was financially illiterate, not of someone who was trying to be financially deceptive;
2. that throughout her time in Canberra, despite being socially isolated, she continued to be a good citizen by contributing in ways that she could to develop cultural and social networks that she found were missing to meet her own needs;[13]and
3. that not only has she incurred penalty tax but she has also lost the opportunity to claim the cost of land tax on her personal tax returns over the period up until 2009/2010 due to the two year amended tax return rule. This amounts to $5,356.00 in lost revenue.[14]

1. She acknowledged that her actions in seeking advice from accountants and their failures to advise her about land tax liability is not, of itself, sufficient to reduce penalty but said that her financial ignorance when she rented the property in 2002, was the reason for seeking such advice. She hoped that the accountants would have, as part of their professional duty to her, given advice about land tax as they knew that she was renting her property. She submitted that the fact that she sought advice from accountants was further evidence of her financial illiteracy. She said that this was not the action of a person who was being financially deceptive and should be taken into account in this light by the Tribunal when determining whether she took reasonable steps to mitigate the circumstances that resulted in the imposition of penalty tax.

1. Based on these submissions she urged the Tribunal to find that she did take reasonable care and that the penalty tax should be remitted.

1. The Applicant then referred to Revenue Circular GEN009[15] and submitted that her circumstances also enabled all or part of the interest payable by her in relation to land tax to be remitted as it was fair and reasonable to do so having regard to her ignorance of land tax and her honest mistake.

1. The Tribunal has determined above[16]that it does not have jurisdiction to review decisions relating to the imposition of interest.

43. The Applicant also referred to precedents for penalty tax being reduced to or assessed at 0% as in _Aston and Commissioner for ACT Revenue(Administrative Review) [17]_and in Steele v Commissioner for ACT Revenue (Administrative Review)[18].

1. The Respondent contended that lessors bear the onus of notifying the Respondent that a property has been rented and of ensuring that land tax is paid in accordance with the statutory obligation.

1. the circumstances that led to the Applicant's failure to pay land tax were not exceptional and do not support remitting all or part of the penalty tax; and
2. the penalty tax of 50% was the correct and preferable decision and was a reasonable penalty that reflected the Applicant's failure to take reasonable care to meet her obligations under the tax law in a timely manner and for a significant period of time.

1. In considering 'reasonable care', the Respondent contended[19]that the Tribunal should find that the Applicant did not take reasonable care because:

1. consulting an accountant for the purpose of preparing income tax returns is unrelated to meeting obligations arising under the LTA; 2. supplying records to an accountant for income tax return purposes is not sufficient reasonable care and there is no evidence from the Applicant that she either requested or was provided with advice from her accountants regarding land tax obligations;

1. the Applicant did not, at any stage, contact the Respondent regarding her land tax obligations or make any enquiries as to whether she in fact had any obligations.

2. In relation to remitting all or part of the penalty tax, the Respondent contended[20] that:

1. there was no voluntary disclosure by the Applicant regarding her failure to pay land tax for the property or any other contact with the Respondent regarding the payment of land tax for the duration of the rental period; 2. if the Applicant had not elected to sell the property, the Respondent may have continued to be unaware of the Applicant's failure to pay land tax.

1. the Respondent began the investigation into the rental status of the property on 19 March 2012 as a consequence of the purchaser's legal representatives requesting a certificate as to rates, land tax and other charges for the purpose of the sale of the property;

1. the Applicant disclosed the rental status on 27 March 2012, after the Respondent's investigation had commenced and pursuant to a notice issued under section 82 of the TAA; 2. the Respondent provides information regarding land tax to property owners by way of inclusion in quarterly rates notifications and during the course of the Applicant's ownership of the property she would have received rates notifications together with land tax information; and 3. as a result of the information circulated by the Respondent, the Applicant was reasonably made aware of her obligations and her failure to read the information provided and discard it is not a sufficient basis for remitting or reducing the penalty tax. It is the Applicant's responsibility to ascertain what liabilities may have existed upon renting the property.[21]

Should penalty tax be imposed; if so at what rate?

1. In the period before the LTA commenced on 1 July 2004, penalty tax under section 22EB of the RLTA was fixed at 200% of the land tax payable. There were no graduations of penalty tax as appear in sections 31-34 of the TAA.

1. Section 31(1) of the TAA set the amount of penalty tax payable at 25%. Pursuant to section 31(2) of the TAA, the amount of penalty tax may be increased to 50% if the tax default was caused wholly or partly by a failure of the taxpayer (or a person acting on behalf of the taxpayer) to take reasonable care to fulfil the taxpayer's obligations under a tax law. The amount of penalty tax clearly depends on culpability.

1. The Tribunal has considered the matters put forward by the Applicant in urging it to find that she took reasonable care to fulfil her obligations, but the Tribunal is not satisfied that any one of these matters or the totality of the matters referred to above enable the Tribunal to be so satisfied.

1. The Tribunal accepts that the Applicant had no intention to avoid the operation of the tax laws. The Tribunal also notes that the Applicant had sought advice from an accountant in 2002 and at later dates. It appears from the evidence that the advice sought was about dealing with rental income in her income tax returns. There was no satisfactory evidence of what instructions were given and accounting advice received. In any event, if the tax default was caused wholly or partly by a failure of her accountant to take reasonable care in advising her of her taxation obligations, section 31(1) specifically includes such a situation.

1. Notwithstanding that the Applicant said she kept 'excellent records' the Tribunal is satisfied from the material before it, that she did not make any or any reasonable enquiry about her land tax obligations. The Applicant said that this was because she did not know about land tax, and she was financially illiterate, financially naive, socially isolated and single-mindedly focussing on her tertiary studies while working part time during the period the property was rented.

1. However, the Applicant also said that she managed her mail by only reading contents specifically addressed to her and discarding brochures enclosed in the envelopes, including brochures included with her rates notices, without reading the brochures. She denied that in electing not to read the brochures she was taking risks. She described it as 'the way she handled her affairs'. Had the Applicant read the brochures enclosed with her rates notices she would have become aware of land tax obligations.

1. The Applicant does bear the onus of making appropriate enquiries about the responsibilities associated with being a landlord, including her liability for land tax. She is also responsible for notifying the Respondent that her property had been rented and ensuring that her land tax liability was discharged. The reasons advanced by the Applicant for not reading information provided to her, not making her own enquiries and not notifying the Respondent that she was renting her property are not compelling. Ignorance of the law is not an excuse for failure to meet legal obligations.

1. The Tribunal is satisfied that penalty tax was properly imposed by the Respondent.

1. Section 22EC allowed for the remission of penalty tax under the RLTA if the Commissioner considered it fair and reasonable to do so. That section is now repealed. Any remission of penalty tax is now provided for in section 37 of the TAA which sets out a more restrictive regime.

1. The remission of penalty tax calls for either "reasonable steps to mitigate" or "exceptional circumstances" to be established as well as "being satisfied that it would be fair and reasonable to remit all or part of the penalty tax". Otherwise the deterrence scheme in the LTA would be undermined.

1. As stated above, the Tribunal is comfortably satisfied that the Applicant did not ascertain what obligations and liabilities flowed from renting her property and ignored information sent to her with her rates notices. Nor did she voluntarily disclose her failure to pay land tax to the Respondent or contact the Respondent, prior to their commencing their investigation, regarding the payment of land tax during the rental period. The Tribunal is not satisfied, from the evidence, that the Applicant took any or any reasonable steps to mitigate the circumstances, or the effect of the circumstances, which resulted in her liability for land tax.

1. The Tribunal is also satisfied that the Respondent took reasonable steps, by circulating information with rates notices about land tax, to ensure that people such as the Applicant were reasonably made aware of their obligations; that the Applicant chose not to read this material and this conduct is not a sufficient basis for remitting or reducing the penalty tax. The Tribunal is not persuaded by the Applicant's argument that she did not read the pamphlets because of their impersonal nature.

1. The Tribunal has also considered whether the Applicant's circumstances which resulted in the land tax liability were exceptional. In this regard she particularly relied on social stressors, her isolation and her overcoming a difficult background.

1. The Applicant provided evidence in the form of a report from her health care practitioner, Ms Susan Dalby, and requested that that report be treated as confidential or not used by the Tribunal in reaching its decision. The Tribunal will issue a suppression order in relation to this report. Having considered the contents of that report the Tribunal agrees with the observations made in relation to that report by the Commissioner in the Reason Statement dated 27 November 2012. The report attests to the fact that the Applicant has achieved success in study, employment and owning a home. It also refers to matters which the Applicant also put to the Tribunal herself such as her single mindedness in focussing on and achieving success. She is entitled to be proud of those achievements.

1. The Tribunal does not agree with the Applicant's claim that her 'claim is being trivialised' by the Respondent and that she 'is being further penalised for her success' by the imposition of the penalty tax and interest. However, it is true that the expectation, at least for tax law in the ACT, is that the tax payer is meant to find out what liability exists.[23]

1. The Tribunal is satisfied that the authorities of Steele and Aston, relied on by the Applicant, can be distinguished on their facts. In Aston, the Tribunal found that Notice had been given to the Commissioner and concluded in paragraph 40 that the Applicant "had made arrangements for the notification to the respondent ...... to be undertaken by the DHA. The evidence also shows that the DHA discharged the applicant's obligation to provide the required information to the respondent. Such failure as occurred was that of the Revenue Office."

64. The Application before that Tribunal in Steele was only with respect to the interest component of the assessment issued by the Respondent. While Senior Member Hatch's observations, and opinion about penalty tax therefore, are obiter[24], it was his clear observation that, given the requirements of section 37, there was no basis for the Delegate for the Commissioner to have remitted the penalty tax of 25% to 0%. He observed that it was common for people to own land in foreign countries (the applicants lived overseas and were British Nationals) "and the expectation at least for tax law in the ACT is that the tax payer is meant to find out what liability exists."[25]

1. Ms Theron, apart for a period of about 2 years when she resided in London, was resident in Australia. When she decided to rent the property in 2002 and while she was studying architecture, she was a resident of the Australian Capital Territory. As a local, she had much better access to the authorities than Mr and Mrs Steele. The Tribunal is not satisfied that making appropriate and relevant enquiries was beyond Ms Theron's capabilities. Senior Member Hatch's following comments in Steele could equally apply to Ms Theron -

"One relevant matter firmly in the Applicants' favour is that at all times they acted honestly. There is no suggestion that the Applicants did anything other than fail to realise that a tax they had never heard of was payable. Every tax payer can sympathise with the Applicants but that does not in my opinion help them with respect to the premium component of the interest rate [the subject of the review].[26]"

1. It is unfortunate for the Applicant that she now finds herself in this situation and the Tribunal is satisfied that she did not engage in any activity intending to deceive the Respondent. However, the Tribunal is also satisfied that her situation arose as the result of a combination of factors - her ignorance of the tax requirements; her failure to read the land tax information provided with rates notices and her not making appropriate and reasonable enquiries about tax liabilities such as land tax when she decided to rent the property and during the relevant period until she sold the property.

1. Notwithstanding how the Applicant herself sees her personal situation from 2002, the Tribunal is not satisfied that any of the matters put to the Tribunal amount to exceptional circumstances in the context of section 37 of the LTA. Given this finding it is not necessary for the Tribunal to determine whether it is fair and reasonable to remit the penalty tax.

1. Having regard to the all of the matters before the Tribunal the order that the Tribunal is making is to affirm the decision under review.

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

[1] [2006] NSWCA 115

[2] [2012] ACAT 76

[3] [2007] ACTAAT 5

[4] [2006] NSWCA 115, Santow JA with whom Handley JA and Bryson JA agreed, paragraph 55.

[5] Applicants Statement of Facts and Contentions, page 5, paragraph 5

[6] Applicant's Statement of Facts and Contentions, paragraph 5(a) on page 6

[13] Applicant's Statement of Facts and Contentions, at page 10 - Written Statement

[14] $16,230.00 land tax to 2009/2010 deducted at 33% = $5,356.00

[17] [2007] ACTAAT 5

[18] [2010] ACAT 15

[19] Respondent's Statement of Facts and Contentions C, paragraph 6

[20] Respondent's Statement of Facts and Contentions C, paragraph 7

[21]22 Steele v Commissioner for ACT Revenue (Administrative Review) [2010] ACAT 15

[23] Steele v Commissioner for Act Revenue (Administrative Review) [2010] ACAT 15, para 12

[24] Obiter dictum - a judge's expression of opinion uttered in court or in a written judgment, but not essential to the decision and therefore not legally binding as a precedent. Oxford Dictionary