Satterley Group’s enchantment over $2.5m tax

Nigel Satterley’s property group is taking the tax commissioner to court docket, claiming a $2.5 million fee to compensate shareholders after a string of failed developments was to protect its status.

Satterley Property Group lodged a discover of enchantment within the Federal Courtroom towards the Federal Commissioner of Taxation final week, claiming $2,557,897 ought to be tax deductible.

The group claimed the $2.5 million fee was made to protect goodwill with traders who made losses on the developments, which might make attracting future investments simpler.

The losses sustained by traders had been allegedly tied to tasks often called the Austin Cove and Beacham Highway joint ventures, from which Satterley Property Group obtained administration and promoting charges.

The group claimed sustaining credibility and good relations with traders was a necessary a part of its enterprise.

In response to the group’s enchantment, the fee made to the taking part shareholders represented 50 per cent of the High-Up Fee agreed underneath its Share Sale Agreements.

The group claimed the High-Up Funds had been incurred on income account, not being capital or of a capital nature, and thus had been deductible.

Within the enchantment, which pertains to the group’s taxable revenue for the monetary 12 months ending June 30, 2020, Satterley Property Group claimed it didn’t get hold of a permanent benefit in making the High-Up Funds.

“The method of incurring and making High-Up Funds was thought of more likely to handle, protect and preserve its enterprise, goodwill and status,” the enchantment doc learn.

“The benefit it sought was to beat the inevitable notoriety of the monetary failure of three associated tasks, and to take care of the goodwill of its enterprise, which was momentary and unsure.

“The potential for detrimental publicity, class actions for damages or authorized motion from traders who lose cash on improvement tasks would extra doubtless than not deter future traders from funding, which might adversely have an effect on the applicant’s future capability to derive assessable revenue.”

A Satterley Property Group spokesperson stated it was not applicable for them to supply remark because the matter was going by the enchantment course of.

A listening to date has not but been set.


Leave a Reply

Your email address will not be published.