Tax Bites

Liquidation and Tax Consolidation liabilities

29th January 2013

  • Insolvency practitioners are rightly concerned about personal liability arising from being appointed as liquidator.
  • If you are appointed as the liquidator of a company that is a member of an Income Tax Consolidated Group you need to be aware that the company will, prima facie, be jointly and severally liable for the income tax debts of the entire Income Tax Consolidated Group.
  • This liability can be mitigated under the tax law with a Tax Sharing Agreement (preferably entered into before being appointed as liquidator) and by making a “clear exit” payment prior to deregistration.
  • Similar risks arise with GST Groups and GST liabilities.
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Tax Bites are general in nature and are not a substitute for specific advice. They are the opinion of Tax Advisory Specialists, and the ATO or the Courts may take a different view. They are not updated for changes in the law or the interpretation of the law since publication.


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