Liquidator not obligated to retain funds in the absence of an assessment – appeal lodged by Commissioner of Taxation
Our Insolvency Update of 3 March 2014 refers to the Federal Court’s decision in Australian Building Systems Pty Ltd (in liq) v Commissioner of Taxation. The court held that liquidators and receivers and managers cannot be held personally liable for any CGT liability subsequently assessed as due (where funds are remitted in the ordinary course and to secured creditors before the Commissioner of Taxation issues the assessment).
The Commissioner of Taxation has now appealed to the Full Court of the Federal Court.
In light of the appeal, Hall & Wilcox recommends liquidators and receivers and managers exercise caution when deciding whether to remit funds where the company has a potential CGT liability.
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