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Follower notice penalties were properly imposed but reduced on appeal

By Mark McLaughlin, August 2022

The decision of the Supreme Court in another case was a ‘relevant judicial ruling’ and it was not reasonable in all the circumstances for the appellant in the present case to refrain from taking the necessary corrective action in response to a follower notice, but the appellant’s appeal against the quantum of penalties was allowed in part.

The appellant trading company sought professional advice in 2003, following which it entered into a tax avoidance scheme involving an incentive arrangement and employee benefit trusts (a short-term equity deferral plan (STEP)) during its accounting period ended 31 March 2004.

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