Ppotential for total amended tax assessments of $206m if ATO...

Ppotential for total amended tax assessments of $206m
if ATO correct (see below)

"St George said it will vigorously fight the Australian Taxation Office's (ATO) ruling concerning deductions claimed by the bank over its 1997 Depositary Capital Securities arrangement (DCS). The ATO today issued St George with an amended assessment for a total of $40 million (after tax) for the tax year ended September 30, 1998.

This relates to an interest deduction claimed by the bank in respect of the subordinated debentures issued to St George Funding Company, LLC ("LLC") as part of the DCS transaction.

St George said if the ATO were to take the same approach in relation to deductions claimed by St George from 1998 to 2004 inclusive, it would result in total amended assessments of $206 million after tax.

This would comprise of $114 million of primary tax and interest and penalties of $92 million after tax.

St George said it was confident that its position was correct and it has obtained detailed legal, tax and accounting advice both at the time of the transaction as well as following commencement of the ATO's inquiries."