ATO Interpretative Decision
ATO ID 2003/507
Income Tax
Lodgement requirements of receivers and liquidatorsFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is a receiver or liquidator required to prepare and lodge tax returns, in accordance with paragraph 254(1)(b) of the Income Tax Assessment Act 1936 (ITAA 1936), for periods of an income tax year which pre date their appointment?
Decision
No. Receivers and liquidators are required to prepare and lodge income tax returns for the period in an income tax year from the date of their appointment. The company itself should prepare and lodge an income tax return for the period in an income tax year prior to the date of appointment of a receiver or liquidator and outstanding returns for prior years.
Facts
A liquidator (or a receiver) is appointed to a company. Income is derived during the liquidator's (or receiver's) appointment.
Reasons for Decision
Section 254 of the ITAA 1936 applies to an entity that is an agent or trustee for the purposes of the ITAA 1936. Paragraph 254(1)(a) of the ITAA 1936 makes a trustee
...answerable as taxpayer for the doing of all such things as are required to be done by virtue of this Act . . . and for the payment of tax...
on any income, profit or gain derived by the trustee in his representative capacity . Paragraph 254(1)(b)of the ITAA 1936 ensures that the trustee is required to make returns and to be assessed on them but only in that representative capacity.
In accordance with paragraph (a) of the definition of 'trustee' in subsection 6(1) of the ITAA 1936, both receivers and liquidators are trustees for the purposes of that Act.
Paragraph 1 of Taxation Determination TD 94/68 Income tax: who is responsible for lodgement of a company income tax return if both a receiver/manager and a liquidator have been appointed? states:
Each [receiver/manger and liquidator] is legally responsible for lodging the return under the provisions of paragraphs 254(1)(a) and (b).
Accordingly, as is made clear by that paragraph, a receiver or liquidator, as trustee for tax purposes, is responsible for income or profits or gains derived in that capacity. Consequently, a receiver or liquidator only has to lodge returns for the period after appointment in respect of that company.
The company should prepare and lodge a return for the period in the income tax year prior to the appointment of a receiver or liquidator. The company should also prepare and lodge any outstanding returns that are required for prior income tax years.
Date of decision: 16 May 2003Year of income: Year ended 30 June 2003
Legislative References:
Income Tax Assessment Act 1936
subsection 6(1)
subsection 254(1)
paragraph 254(1)(a)
paragraph 254(1)(b)
Related Public Rulings (including Determinations)
Taxation Determination TD 94/68
ATO ID 2003/506
Keywords
Receivers & managers
Receivership
Liquidation
Lodgment of tax returns
Tax returns
Trustees
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 16 May 2003 | Original statement |
| 29 October 2004 | Archived |