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.

The Taxation Administration Act provides that you, your agent or your legal personal representative may apply for a Private Binding Ruling. Importantly, you cannot apply for a ruling in respect of another taxpayer’s affairs. Therefore, a spouse cannot apply for a ruling in respect of the other spouse, even if the tax outcome is pertinent to both spouses' financial settlement.

The Family Court addresses this issue in Kerr & Christie by ordering that, after four weeks following the date of the Conciliation Conference, and if agreement between Ms Kerr and Mr Christie is not reached, Mr Christie must apply to the Commissioner of Taxation for a Private Binding Ruling in order to resolve the tax contention held by Ms Kerr.

Dean is an Accountant and Tax Adviser who provides specialist tax services in relationship separation and divorce matters.

He provides expert guidance in navigating the tax consequences of a relationship breakdown. This includes expert tax advice on the division of relationship assets, property settlement tax structuring and negotiation support as well as ongoing accounting and tax services post property settlement.