CSR Limited will receive a significant tax refund after the High Court today refused the Australian Tax Office (ATO) special leave to appeal against a Federal Court decision, on the tax treatment of a lump sum litigation settlement.

The full bench of the Federal Court ruled last year that CSR was entitled to classify a settlement from the NZI Group as a capital gain, rather than as assessableordinary income. CSR had paid the taxin 1995 but subsequently successfully challenged this treatment in the FederalCourt.

In treating the payment as a capital gain CSR is able to offset the capital gainwith capital losses from previous years, thus reducing its tax liability.

Subject to formal ATO approval of those tax losses, today’s decision is expected to resultin a tax refund to CSR of $33 million plus interest of approximately $11million.