Billionaire Shahin family in ATO war over luxury cars including Bentleys, Rolls Royces and Ferraris

A long-running stoush between the Shahin family, who founded OTR convenience stores and the Smokemart chain, over the use of a fleet of 40 luxury cars can be revealed for the first time.

Brothers Yasser and Sam Shahin (pictured), together with Charlie, are embroiled in an ATO legal war. Picture: Supplied

Forty luxury cars including Bentleys, Rolls Royces and Ferraris are at the centre of an escalating legal stoush between the taxman and the Shahin family, the billionaire founders of Smokemart and the OTR convenience store and petrol station chain.

The Taxation Office claims a Shahin family company should pay fringe benefits tax on the use of the cars for four years by the three brothers who run the empire, Charlie, Sam, and Yasser Shahin.

But the company, SEPL, claims the tax isn’t payable because the brothers aren’t employees, despite working up to 60 hours a week in the business.

The dispute has been running behind closed doors since 2021 but can now be revealed after the ATO last month went to court to appeal an Administrative Appeals Tribunal decision in favour of the Shahins.

Dr Sam Shahin in his garage at the Shahin family’s Bend Motor Sport Park in Tailem Bend in 2022. Picture: Matt Turner

In documents filed with the Federal Court, the ATO claims that SEPL began buying “numerous high performance vehicles and other luxury cars, including multiple Bentleys, Rolls Royces, Mercedes Benz, Ferraris, Aston Martins, McLarens and Porsches” in 2006.

The cars were picked by the Shahin brothers who “had exclusive use of these vehicles,” the ATO claims.

It told the court the brothers used the cars both in the business and for private purposes, and claimed tax deductions for business use, between 2016 and 2020.

However, the ATO claims that SEPL, part of the family’s Peregrine Corporation business empire, should have paid fringe benefits tax for the men’s use of the cars.

The ATO has not disclosed how much it claims is owed.

The Shahin family are heavily involved in motorsport, with Sam Shahin driving a Porsche in international competition while Yasser Shahin won his class at historic French endurance race Le Mans this year.

Yasser Shahin after competing in Adelaide in 2018. Picture: Calum Robertson

Fringe benefits tax was introduced in 1986 by then-treasurer Paul Keating to tax benefits given to employees including long lunches, free flights, cars, and low-interest loans. It is worked out using a formula based on the value of the benefit.

The Shahin brothers say the company doesn’t have to pay the tax because, although they worked extremely hard running the business, which at the time owned as many as 160 petrol stations and 200 Smokemart outlets, they were not employees.

Their father, Fred Shahin, started the business with one petrol station after fleeing to Australia as a Palestinian refugee in 1948.

On The Run Petrol Station. Picture: OTR

Last year the family sold the Smokemart and OTR businesses, reaping $1.2bn and catapulting the brothers into Australia’s top 250 richest people.

The ATO dispute was heard by the AAT last year under pseudonyms, masking the identity of the brothers.

In evidence to the tribunal, Yasser Shahin - who was given the codename “Mr Smith” - said all three brothers “devote their whole life to the running of the business” and were “effectively on call 24 hours per day to run the business”.

“It’s not like we worked half-time and spent the other half-time on a boat,” he told the tribunal.

He told the tribunal that being an executive director was different from being employed as a manager.

“I’m not trying to be cute in my answers, I just want to be very precise,” Mr Shahin told the tribunal.

The Shahins sold to Viva Energy last year. Left to right: Sam Shahin, Viva Energy managing director Scott Wyatt, Yasser Shahin and Charlie Shahin. Picture: Supplied

“And so I think words like ‘hands on’ are fair. But the minute you move into executive management, I’m just careful because there were people employed to do every job in the business.”

He also said he was unaware that he was on the company’s payroll system and it had never paid him wages.

In his decision, AAT deputy president Bernard McCabe agreed that the brothers weren’t employed by the company and threw out the ATO bill.

A spokesperson for Peregrine Corporation declined to answer detailed questions but said SEPL would fight the ATO’s appeal.

“While the matter is subject to ongoing court proceedings, Peregrine Corporation is unable to comment further,” the spokesperson said.

Originally published as Billionaire Shahin family in ATO war over luxury cars including Bentleys, Rolls Royces and Ferraris