Deputy Commissioner of Taxation v Bluebottle UK Limited and Others

[2006] NSWCA 360

NSW Court of Appeal

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Interrogate

Catchwords

1. Taxation
2. › Income tax
3. › Collection and recovery
4. › Non-resident taxpayers
5. › Person in receipt or control of money from non-resident
6. › Notices under s 255 Income Tax Assessment Act 1936 (Cth)
7. › Whether notice under s 255(1)(b) can be given independently of notice under s 255(1)(a)
8. › Whether notice must specify date for payment of tax
9. › Income Tax Assessment Act 1936 (Cth), s 255
1. Corporations
2. › Dividends
3. › Declaration of dividends
4. › When debt arises
5. › Whether directors' resolution declaring dividend creates debt at date of declaration or only at date fixed for payment
6. › Whether 'determine' in company constitution synonymous with 'declare'
7. › Corporations Act 2001 (Cth), ss 254U, 254V
1. Equity
2. › Assignments
3. › Equitable assignment of future property
4. › Priority between statutory charge and subsequent assignment
5. › Whether s 255 charge prevails over later equitable and legal assignments of dividend
6. › Whether assignee takes subject to equities including statutory charge
7. › Property Law Act 1974 (Qld), s 199
1. Taxation
2. › Income tax
3. › Collection and recovery
4. › Non-resident taxpayers
5. › Scope of s 255 Income Tax Assessment Act 1936 (Cth)
6. › Whether s 255 limited to money received from third parties on behalf of non-resident
7. › Whether s 255 applies to dividends payable from company's own funds
8. › Income Tax Assessment Act 1936 (Cth), s 255

Quick Take

The word 'determine' in a company constitution, when used in the context of dividends and accompanied by provisions for fixing amount, time and method of payment, is synonymous with 'declare' for the purposes of s 254V(2) of the Corporations Act 2001 (Cth), so that a debt arises when the dividend is determined/declared, not when the payment date arrives. A notice under s 255(1)(b) of the ITAA requiring retention of moneys can be given independently of a notice under s 255(1)(a) requiring payment; a valid s 255(1)(a) notice is not a precondition to the engagement of the retention obligation. The s 255 statutory charge, once triggered, prevails over subsequent assignments of the dividend debt, whether equitable or legal. Section 255 is not limited to money received from third parties on behalf of the non-resident and applies to dividends payable from the company's own funds.