Insolvency options paper: free template for submissions

 Checklists and guides, Insolvency Laws, Insolvency practices, Personal Bankruptcy, Regulation  Comments Off on Insolvency options paper: free template for submissions
Jul 292011
 

NOTE: SUBMISSIONS CLOSED.  ALL PUBLIC SUBMISSIONS ARE NOW PUBLISHED ON THE TREASURY WEBSITE.  CLICK HERE TO VIEW OR COPY.  PJK 23/8/2011.

Want to make a submission regarding the Government’s important options paper on insolvency reform, titled “A modernisation and harmonisation of the regulatory framework applying to insolvency practitioners in Australia”?  Use my free template, available for download HERE.

This  simple table template, written with MS Office Word, lists the 135 discussion questions being raised in the options paper and provides space beside each question for your comments/opinions.  Just save the document to your computer,  fill it in and email it to the Treasury Department at insolvency@treasury.gov.au.  Closing date for submissions is 29 July 2011, but submissions soon after that date are likely to be accepted.

NOTE: submissions will be made public unless marked Confidential or Not for Publication.

The options paper in available at the Treasury website.

Insolvency Practitioners Assoc urges member caution on tax liability

 Practitioners Association (IPAA), Priority Debts, Tax debts, Tax liabilities, Taxation Issues  Comments Off on Insolvency Practitioners Assoc urges member caution on tax liability
Mar 102011
 

 Australia’s Insolvency Practitioners Association (IPA) has told members to:

 “be aware that the sale of an asset of the insolvent company or individual may trigger a capital gains tax (CGT) liability.  The practitioner then needs to determine the status of that liability.  The law in relation to where CGT liability falls on the sale of an asset by an insolvency practitioner is not clear”.

 The warning appears today (March 10, 2011) on the IPA website.

 The issue of post-appointment tax debts has been highlighted on this blog as follows:

 o       Post-appointment income tax debts of liquidator (October 10, 2010)

o       Taxing capital gains made during liquidation (October 15, 2010)

o       Legal opinion warns external administrators about personal liability for company taxes (November 16, 2010)

The IPA’s complete statement reads:

“Capital gains tax – need for caution in insolvency administrations 

Insolvency practitioners should be aware that the sale of an asset of the insolvent company or individual may trigger a capital gains tax (CGT) liability.  The practitioner then needs to determine the status of that liability.  The law in relation to where CGT liability falls on the sale of an asset by an insolvency practitioner is not clear. 

For example, in the case of a controllership, the liability may be a liability of the company itself, or a personal liability of the controller. In the case of a bankruptcy, the CGT liability may fall on the bankrupt or become a liability of the trustee or simply be a post-bankruptcy debt. 

The IPA has been in discussions with the ATO for some time in an attempt to come to a correct position.  The ATO is yet to give its view or issue any ruling. 

The IPA will advise members of any developments in clarifying the legal position with the ATO.  In the meantime, members should be aware of this issue and take their own advice as necessary in relation to CGT liabilities in their administrations.

 Any questions, please contact us.”

It would be interesting to know what the IPA’s point of view is on this tax issue.  Presumably there is disagreement between it and the ATO as the two of them work together to “come to the correct position”.  More than likely the point of contention concerns the personal liability of external administrators.

Mystery of ION Ltd $13 million income tax refund continues despite massive report

 Tax debts, Tax liabilities, Taxation Issues  Comments Off on Mystery of ION Ltd $13 million income tax refund continues despite massive report
Oct 212010
 

The insolvency administrators’ 200 page report on ION Limited and subsidiaries (20/10/10) does not mention the once-anticipated income tax refund of $13 million.

So the mystery – described in my article “Insolvency administration income tax refund held up” – continues.

But then a tax dispute over $13 million could be regarded by some as trivial, compared with the momentous and complex issues addressed in the Deed Administrators’ report.  The report deals with ION Limited and its 17 subsidiary companies.  It was produced after the Deed Administrators had received from shareholders “numerous allegations of misconduct by ION”, and after the Deed Administrators obtained directions/permission regarding the report from the Federal Court of Australia.

The report’s main purpose is described in its introduction:

“In this Report we set out details of the work that has been done to date in relation to shareholder claims and the steps which remain to be taken to enable the Deed Administrators to determine these claims and to distribute funds to creditors. “

The present position in the administrations is summarised as follows:

“Since the initial appointment of the Administrators and the appointment of the Deed Administrators on 27 May 2005, the realisation of ION’s  businesses and assets has been completed. The review of proofs of debt lodged by suppliers of goods and services and by financiers has largely been completed with only a small number of complex claims still in dispute. The only matter of significance still to be concluded is the adjudication of proofs of debt lodged (or to be lodged) by shareholders.”

A taste of the report’s contents can be seen in the main headings in its Table of Contents, namely:

PART A – UPDATE AND WAY FORWARD

1. Introduction
2. Executive Summary
3. The Fund
4. Who can share in the Fund
5. Calling for and lodgement of Proofs of Debt or Claim
6. Estimated Return to Creditors
7. Updates to Creditors and Creditors’ Committee meetings
8. Purpose of Report
9. The Way Forward
 

PART B – OVERVIEW OF RESULTS OF INVESTIGATIONS

10. Overview of ION Group
11. Overview of Forensic Investigation Process
12. Factual Overview
13. ION’s disclosures regarding Financial Outlook
14. Consequences if tru position disclosed
15. Potentially Actionable Disclosures and Non-Disclosures

PART C – DETAILED RESULTS OF INVESTIGATIONS

16. Introduction
17. Financial Controls
18. Albury
19. Altona
20. Wingfield
21. North Plympton
22. Auckland
23. Kentucky
24. Energy Services
25. ION’s disclosures regarding Financial Outlook
Annexure 1. Pooled and Non-Pooled Entities.

For the full report go to http://www.ionlimited.com and click on the link to ION Report to Creditors 20 October 2010. For a short version click on the link to Creditor information.

Enjoy the read!

Any information on what happened to the expected income tax refund would be gratefully received.

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The comments and materials contained on this blog are for general information purposes only and are subject to the disclaimer. 

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