Chinese billionaire Huang Xiangmo owes the Australian Taxation Office $140 million but his substantial offshore assets cannot be frozen, an appeal court has said.
In December last year the Federal Court entered judgment in favour of the ATO against the property developer for $140.6 million dollars in income tax, interest and penalties.
Billionaire Huang Xiangmo's offshore assets cannot be the subject of a freezing order, an appeal court said.Credit: James Brickwood
The court had previously made orders freezing Mr Huang's local and overseas assets, including a $13 million mansion in Mosman held in the name of his wife. Mr Huang was also ordered to disclose his worldwide assets to the Tax Office.
In a judgment in September, Federal Court Justice Anna Katzmann said Mr Huang's Australian assets "do not seem to be enough to satisfy the tax liability" and his offshore money transfers had "increased dramatically" after an ATO audit began in 2017.
Mr Huang appealed against a separate decision of Justice Jayne Jagot relating to a freezing order over his overseas assets. In a judgment on Monday, the Full Court of the Federal Court overturned the order and said it should not have extended beyond Australia.
The court – Justices Anthony Besanko, Thomas Thawley and Angus Stewart – said Mr Huang had "substantial assets in the People’s Republic of China (PRC) and in Hong Kong".
However, there was "no realistic possibility that the Deputy Commissioner [of Taxation]’s judgment debt would be enforceable in the PRC or Hong Kong" and the freezing order should not have included assets overseas.
The ATO is expected to lodge an appeal against this decision.
The bulk of the tax bill is attributed to the sale of a mansion in Hong Kong, which the Tax Office believes gave rise to a capital gains tax liability.
Mr Huang has resided in Hong Kong since his Australian permanent residency visa was cancelled on December 5, 2018, for reasons including character grounds. He had left Australia on December 4.
Mrs Huang left Australia on September 11 last year.
The court said the ATO's submissions suggested he had already complied with orders to disclose his worldwide assets but it could have "consequences in the future" and should also be overturned.
The NSW Independent Commission Against Corruption heard allegations last year that Mr Huang delivered a $100,000 cash donation to the NSW Labor Party in 2015 in a plastic Aldi shopping bag. Mr Huang, who is banned from making political donations in NSW under laws targeting property developers, declined to give evidence to the ICAC but denied making the donation.
Former NSW Labor boss Jamie Clements denied receiving the money but told the ICAC Mr Huang gave him $35,000 in a wine box in August 2015 to help cover his legal bills.
He also worked as a consultant for Mr Huang on a $4000-a-week retainer for a time after leaving the Labor Party.
The ICAC has yet to release its findings and the ATO's pursuit of Mr Huang is not related.
The parties in the tax case return to court next week.
Mr Huang has accused the Tax Office of acting as a "despicable tool of political persecution".
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