Yearly Archives: 2016

FCT v Oswal (No 5) – Court dismisses hearing taxpayers’ testimony by video-link

The Federal Court has refused an interlocutory application by a taxpayer that the testimony of her and her husband in a tax case be heard by video-link or the testimony be taken by the Court on commission in Hong Kong pursuant to the Federal Court of Australia Act 1976 and the Foreign Evidence Act 1994.…

Normandy Finance Pty Ltd v FCT – Payments from Vanda Gould orchestrated overseas companies to resident companies were loans, not shams

The Federal Court has held that payments made from an overseas company to its Australian subsidiary and another related company were genuine loans and not shams, despite the Commissioner’s claims that the payments were sham transactions used by the controller of the companies to bring into Australia assets held for his benefit and that they…

Re Hughes and FCT – Pilot held to be Australian resident for tax purposes

The AAT has held that a commercial airline pilot who worked overseas for a foreign airline during the income tax years ended 30 June 2010, 30 June 2011, and 30 June 2012 was an Australian resident during those years. The taxpayer claimed he should not have to pay income tax in Australia on the income he earned from his work because…

Re Sandbach and FCT – Taxpayer fails burden of proof; interest not incurred

The AAT has affirmed default assessments and penalties issued by the Commissioner, finding that the taxpayer could not use “threatened” losses from proceedings that had ended over a decade ago to reduce his taxable income to nil. The taxpayer, a barrister, was a member of a partnership, which, through a nominee company, purchased a farm…

Re JLSP and Innovation Australia – Trial to test drug’s safety was a core R&D activity

The AAT has found that an Australian-based company in an international pharmaceutical research group conducted a core R&D activity when it ran a clinical trial to determine the safety and efficacy of a client’s drug. Innovation Australia refused make an advance finding that the taxpayer’s clinical trial was a core R&D activity after finding that…

Re Bhatti and FCT – Accountant’s work-related expenses largely disallowed

A senior accountant has been largely unsuccessful before the AAT in claiming deductions for work-related expenses, including home office, self-education and travel expenses in her 2012 and 2013 tax returns. The Commissioner disallowed various deductions and imposed an administrative penalty for failure to take reasonable care. The Commissioner partly allowed the taxpayer’s objection and, after…

Tech Mahindra Limited v FCT – taxpayer with P/E in Australia appeals decision that it is taxable on some of its services provided from India

The taxpayer has appealed to the Full Federal Court against the decision in Tech Mahindra Limited v FCT [2015] FCA 1082. In the case, the Federal Court held that a company resident in India and registered in Australia, and which carried out IT services for Australian clients both from its permanent establishment (PE) in Australia…

Blank v FCT – taxpayer seeks leave to appeal to High Court – USD160m paid under ‘profit participation scheme’ held to be ordinary income

The taxpayer has applied for special leave to appeal to the High Court against the decision in Blank v FCT [2015] FCAFC 154. In a majority decision, the Full Federal Court dismissed the taxpayer’s appeal and confirmed that payments of US$160m he received in instalments following his termination from a company was assessable to him as…

PFGG v FCT – taxpayer appeals decision that it was not entitled to ‘small business CGT relief’ because it was not a ‘small business entity’

The taxpayer has appealed to the Federal Court against the decision in Re PFGG and FCT [2015] AATA 972. In that decision, the AAT confirmed that the taxpayer involved in the mining industry which made a capital gain of $5.4m from the sale of Western Australia mining tenements was not eligible for the CGT small…

Australian Building Systems Pty Ltd (In Liquidation) case – no s254(1)(d) retention obligation and no preference for Commissioner

In the cases of Commissioner of Taxation v. Australian Building Systems Pty Ltd (In Liquidation) and Commissioner of Taxation v. Ginette Dawn Muller and Joanne Emily Dunn as Liquidators of Australian Building Systems Pty Ltd [2015] HCA 48, the High Court held (3-2 on 10 Dec 2015) that s254(1)(d), of the ITAA 36, did not…