Federal Court of Australia
Minerva Financial Group Pty Ltd v Commissioner of Taxation [2022] FCA 1092
SUMMARY
In accordance with the practice of the Federal Court in cases of public interest, importance or complexity, the following summary has been prepared to accompany the orders made today. This summary is intended to assist in understanding the outcome of this proceeding and is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment which will be available on the internet at the Court’s website. This summary is also available there.
The applicant, Minerva Financial Group Pty Ltd (the applicant) is a member of a group of companies and trusts known as “Liberty” or the “Liberty group”. The Commissioner of Taxation (the Commissioner) alleged that during the relevant tax years ended 30 June 2012 to 30 June 2015, the applicant entered into three schemes for the dominant purpose of enabling it to obtain a tax benefit in connection with each of them, within the meaning of s 177D of the Income Tax Assessment Act 1936 (Cth) (ITAA36).
Broadly speaking, the three schemes alleged were as follows:
(1) The first scheme comprised the establishment of corporate and trust “silos”, and the nomination of Minerva Holding Trust (MHT) as the residual income unitholder of the securitisation trusts established from 2009, and directing income from the securitisation trusts through MHT.
(2) The second scheme comprised the transfer of ownership of Minerva Financial Group Trust (MFGT) from the applicant to the ultimate parent company, Jupiter Holdings BV, in December 2007, and the failure of the applicant, as trustee of MHT, to distribute more than only nominal amounts of MHT’s distributable income to the corporate silo, instead distributing the majority of income to the trust silo.
(3) The third scheme was similar to the second scheme, except that it did not involve the transfer of ownership of MFGT from the applicant to Jupiter.
The Court concluded that:
(1) The applicant did not enter into or carry out the first scheme for the dominant purpose of enabling it to obtain a tax benefit in connection with that scheme within the meaning of s 177D of the ITAA36.
(2) The applicant entered into or carried out the second and third schemes for the dominant purpose of enabling it to obtain a tax benefit in connection with those schemes within the meaning of s 177D of the ITAA36.
The Commissioner’s objection decision is to be set aside in part, and the applicant’s objection allowed in part. Because the parties proceeded from their respective positions that the objection decision should either stand or fall, the orders which they sought at the hearing of this proceeding reflected those positions. Accordingly, the following order was made immediately prior to the publication of the reasons:
On or before 7 October 2022, the parties are to confer and submit to the Court a joint proposal, or if they are unable to agree, separate proposals for the further conduct of this proceeding, including the determination of the question of costs of the proceeding, and any other orders to give effect to these reasons.
O’CALLAGHAN J
16 SEPTEMBER 2022
MELBOURNE
