The Australian Taxation Office (ATO) took the view that the mechanism was a tax avoidance scheme, a scheme which came under Part IVA of the "Income Tax Assessment Act 1936". The ATO treated the transaction as Kleinschmidt selling to the Peabody trust, and then on-selling to the public in the float, making a profit of the difference. This was a capital gain, and the 1/3 of that attributable to Mary Peabody as trust beneficiary was $888,005. The ATO added that to her return for the year ending 30 June 1986.