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    Breaches of directors' duties used for tax collection

    In brief:    Company liquidators have successfully argued that the participation by directors (including a de facto director) in a tax evasion scheme breached various directors’ duties. The scheme involved back-to-back loans into Australia with untaxed offshore funds accumulated by the brothers who built the Nudie juice business. Tax debts owing by the companies were held to be part of the losses caused by such breaches and were consequently recoverable from the directors by the liquidators.

    More:    This case is the latest in a number involving the Binetter family, arising from Project Wickenby. It illustrates a relatively novel approach to the collection of tax debts owing by presumably insolvent companies, establishing a pathway for liquidators direct to the directors. The case is also a good reminder that it is a mistake to focus solely on tax laws, including in relation to legitimate tax planning arrangements – many arrangements are undone not by failings necessarily related to tax, but instead related to aspects of the general law. (BCI Finances Pty Ltd (in liq) v Binetter (No 4) [2016] FCA 1351)

    15 Dec 2016

    Topic: Income Tax

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