Executive slugged $1m tax bill on luxury estate

A Former Goldman Sachs executive and confidant of Peter Costello has been slugged with a $1 million tax bill after being dobbed in for failing to pay land taxes on his $30 million Sydney waterfront estate.

The stoush involving influential business identity Alastair Walton and his ex-wife, Gillian, has come to light despite a bid to seal the legal proceedings behind confidentiality and suppression orders in the NSW Civil and Administrative Tribunal.

Fairfax Media can reveal the state government opened an investigation into the Waltons more than four years ago after receiving a tip-off that the couple allegedly concealed tax liabilities from renting out their Vaucluse mansion during an extended stint in Rome.

The Coolong Road property, which has a tennis court, pool and jetty, became the focus of international media attention after Hollywood star Leonardo DiCaprio rented it for $15,000 a week while filming Baz Luhrmann's epic The Great Gatsby in Sydney in 2011.

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Mr Walton, a former chairman and managing director of Goldman Sachs, is a founding member of investment bank BKK Partners, the firm the former treasurer joined in 2009.

The allegations of financial impropriety, which came from a disgruntled tenant, led NSW revenue authorities to discover the Waltons hadn't paid land tax on their seven-bedroom home between 2009 and 2011. At the time, the home was in the name of Ms Walton alone.

Documents show the alleged rort began in 2008 with a series of leases, apparently used to conceal the presence of a long-term tenant in the home.

The arrangement meant the Waltons were exempt from paying land lax because the property would still appear to be their place of residence rather than be classified as a rental by revenue authorities.

But the under-the-table deal apparently broke down after a dispute about the shared utility bills for the property's ''tennis house'', which was still being occupied by a member of the Walton family.