Implications from the High Court decision in Placer Dome

In December 2018, the High Court handed down the much-anticipated stamp duty decision in Placer Dome.

In the cover article in Taxation in Australia's May issue, Johanne Thomas, CTA, considers the broader implications of the decision relating to the identification of goodwill and the valuation of land and other assets, particularly in the mining context.

These issues may also be relevant in a range of contexts other than stamp duty, including tax consolidation, thin capitalisation and capital gains tax.

The decision handed down by the High Court of Australia in Commissioner of State Revenue v Placer Dome Inc on 5 December 2018, found unanimously for the Commissioner.

This decision marks the end of a long road for the parties, and was handed down almost 13 years after the transaction which triggered the dispute.

The decision concerned the assessment of stamp duty arising from the acquisition by the respondent (now an amalgamated entity named Barrick Gold Corporation) of a controlling interest in Placer Dome Inc.

Although the assessment under consideration was issued on the basis that Placer Dome was land rich under stamp duty provisions that have since been repealed, many of the issues considered by the High Court remain significant under the current provisions.

As the article notes, “Goodwill for legal purposes extends to sources which generate or add value to a business by attracting custom.”

Johanne's article covers a summary of the facts, looks at the decisions of the State Administrative Tribunal, the Court of Appeal, and of the High Court, before looking at the broader implications of the decision.

Johanne Thomas, CTA, is a Managing Associate Deloitte Legal.

His article is available for members to read now in the May 2019 issue of Taxation in Australia.

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