What is a Private Binding Ruling?
A Private Binding Ruling is a statement from the Commissioner, pursuant to s359 of the Taxation Administration Act (1953) (Cth), issued to the applicant taxpayer on how taxation applies to that taxpayer’s specific circumstances. A Private Binding Ruling is binding in the sense that the Commissioner is committed to assessing any taxation in respect of that taxpayer’s circumstances in the manner in which is outlined in the ruling.
A taxpayer may apply for a ruling in respect of existing circumstances, or better yet, in respect of prospective circumstances, such as a future transaction being contemplated. As was the case in Kerr & Christie, a taxpayer may also specifically seek the Commissioner’s confirmation on whether there is any future tax attached to assets that are subject to a financial separation under the Family Law Act.