Commissioner of Taxation v Ludekens (No. 2)  FCA 775
Following the introduction of the promoter penalty regime, there was significant uncertainty as to how it would be applied in practice and, in particular, the likely quantum of the penalty that might result. Ludekens (No. 2) sheds light on this and provides guidance on how the Court will consider and exercise its discretion in deciding penalty quantum.
All that remained to be decided in Ludekens (No. 2) was the quantum of penalty to be imposed on Dr Ludekens and Mr Van de Steeg for contravening the promoter penalty provisions. In their decision handed down on 28 June 2016, the Federal Court provided insight into how these provisions will be approached and, in doing so, demonstrated an approach that was distinct to that of the Commissioner, who had requested significantly larger penalties and had a harsher stance.
In particular, the Federal Court in Ludekens (No. 2) comments on the Commissioner’s submissions and narrows down the factors to be considered when determining penalty amounts. Further, Ludekens (No. 2) demonstrates the Court will impose substantial penalties on contraventions of the promoter penalty provisions but will take into consideration the personal circumstances of Taxpayers and other relevant factors, to reach a fair and just result.