The taxpayer has appealed to the Full Federal Court against the decision of Thawley J in Greig v CofT  FCA 1084. The Federal Court had held that the taxpayer was not entitled to a deduction under s 8-1 of the ITAA 1997 for share losses of $11.85m and legal fees.
The taxpayer had argued that the losses were revenue losses because they were incurred in a “business operation or commercial transaction” of a kind contemplated by the principle established by the High Court in the Myer Emporium case. The Federal Court however found that the shares in question were not acquired as part of a “business operation or commercial transaction”, even though he intended to obtain a profit or gain from acquiring those shares.
There is a fuller discussion of the first instance case in this Tax Technical Article.
[LTN 163, 24/8/18; Tax Month – August 2018]