Taxation Administration Act 1999

This section applies if—

a person (the agent) has possession, control or management of a business or property of a taxpayer as an agent or trustee or in any other capacity; and

obligations under a tax law (whether about the payment of tax or otherwise) remain undischarged by the taxpayer or will arise in relation to the business or property.

The agent must, as soon as and so far as is practicable, ensure that—

the obligations of the taxpayer under a tax law that remain undischarged are discharged; and

all further obligations that arise under a tax law in relation to the business or property are discharged while the person continues to have possession, control or management of the business or property.

For those purposes the agent must set aside (and, so far as necessary, liquidate) assets of the taxpayer (or the taxpayer’s estate) to the value of any tax that has become or becomes payable and use those assets to pay the tax.

If the agent fails, without the commissioner’s written permission, to set aside, liquidate and use sufficient assets to pay the tax, the commissioner may recover from the agent as a debt the whole or a part of an amount that is assessed as being payable as tax in relation to the business or property and remains unpaid, but the agent will not otherwise be personally liable for the payment of the tax.

The agent is entitled to be indemnified by the taxpayer (or out of the taxpayer’s estate) for payments made or action taken under this section.

This section does not prevent the making of a payment to the agent out of the assets, in priority to tax, of any reasonable remuneration, charges and expenses to which the agent would, apart from this section, be entitled in relation to his or her exercise of the agent’s functions.