ASX Announcement - National Receives Additional Amended Tax Assessments - 5 May 2005

In February 2004, the National announced that it had received amended assessments from the Australian Taxation Office (ATO) which sought to disallow interest deductions on exchangeable capital units (ExCaps) for the tax years 1997 to 2000. 

At that time, the National also informed the market that the ATO was considering its position in respect of interest deductions claimed by the National on its ExCaps for the years 2001 to 2003. 

The National has now received amended assessments from the ATO for those years.  As previously advised, these assessments are for $135 million of primary tax.  At the time of the announcement in February 2004, it was indicated that interest and penalties may be imposed.  It has now been determined that an amount of $98 million (after tax) will apply in this regard making a total of $233 million (after tax).  No interest deductions have been claimed for 2004 and subsequent years while the matter remains in dispute.

The National has also received amended assessments from the ATO for the years 1998 to 2001 disallowing certain costs associated with the issue of the ExCaps.  These assessments are for $6 million of primary tax and interest and penalties of $6 million (after tax), a total of $12 million (after tax).  Should the ATO also disallow issue costs claimed in 2002 and 2003, the further primary tax assessed would be approximately $2 million.  Interest and penalties may also be imposed.

The Group remains confident that its position in relation to the application of the taxation law is correct and intends to dispute the amended assessments and pursue all necessary avenues of objection and appeal.

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