Billabong founder may chase EY after losing $50m tax appeal
EY advised Gordon Merchant on a “desirable structure” for his share sale. The ATO and the courts had a different view.
Billabong founder Gordon Merchant is set to decide whether to pursue plan B in his five-year battle with the tax office over a $50 million bill he blames on bad advice from professional services giant EY.
On Tuesday, the Full Federal Court ruled 2–1 that the “desirable structure” he adopted in 2015 to minimise tax on the sale of shares in his plastics business, Plantic Technologies, was an illegal tax avoidance scheme.
Merchant can press on with a special leave application to the High Court or shift focus to his case against EY and its former tax partner Ian Burgess, which is before the Queensland Supreme Court.
EY and Burgess were not involved in the ATO litigation and have said the case “only reflects a portion of the advice” provided by the firm regarding the Plantic sale. Burgess left EY in 2022 and now works with “high wealth family groups” at his own firm in Brisbane.
