Words and Phrases - "due"
Commissioner of Taxation v. Australian Building Systems Pty Ltd (In Liquidation), [2015] HCA 48
On 6 April2011, the creditors of Australian Building Systems Pty Ltd. ("ABS") resolved that it be wound up. On 21 July 2011, the liquidators caused ABS to sell real property giving rise to a capital gain of $1,120,000. S. 254(1)(d) of the Income Tax Assessment Act 1936 (Cth) (the "1936 Act") requires every agent and every trustee "to retain from time to time out of any money which comes to him or her in his or her representative capacity so much as is sufficient to pay tax which is or will become due in respect of the income, profits or gains." In determining that the liquidators had no retention obligation before the making of an assessment or deemed assessment in respect of the capital gain, French CJ and Kiefel J stated (at para. 30):
An understanding of the term "tax which is or will become due" in s 254(1)(d) as referring to tax which has been assessed and is or will become payable, is… consistent with an established interpretation of the word "due" as used in the 1936 Act.
The Queen v. Derbecker, 84 DTC 6549, [1984] CTC 606 (FCA)
In S.40(1)(a)(iii)(A), "the words 'due to him' look only to the taxpayer's entitlement to enforce payment and not to whether or not he has actually done so." Thus, where part of the proceeds of disposition of shares was represented by a promissory note expressed to be payable "on demand after December 31, 1976", no reserve was available to the taxpayer after 1976 notwithstanding that no demand for payment was made by him.