Taxation Ruling
IT 2079
S.218 notices - sale of mortgaged properties
-
Please note that the PDF version is the authorised consolidated version of this ruling and amending notices.This document has been Withdrawn.View the Withdrawal notice for this document.
FOI status:
May be releasedFOI number: I 1078578PREAMBLE
Following issue of Taxation Ruling No. IT 2042 representations have been received from interested parties to the general effect that the Ruling is incorrect in law.
2. Consequent upon those representations the matter has been referred to counsel for further advice.
RULING
3. Taxation Ruling No. IT 2042 is confirmed subject to the addition of the following paragraph.
4. However, it is to be accepted that a purchaser may pay out a mortgage and claim a set off against the vendor. Provided such an arrangement is not entered into by the purchaser at the direction of the vendor it will be accepted that the moneys applied by the purchaser to pay out the mortgage are not covered by a notice issued under section 218 on the purchaser in respect of unpaid tax due by the vendor. This ruling applies where a purchaser proffers two payments at a settlement - one to discharge the mortgage made in favour of the mortgagee and the other payment (for the balance of the purchase price) made in favour of the vendor or as the vendor directs. It is the latter payment (or payments) to be made in favour of the vendor, or as the vendor directs, which may be covered by a section 218 notice relating to unpaid tax due by the vendor.
COMMISSIONER OF TAXATION
10 May 1984