Monthly Archives: February 2017

*Resource Capital Fund III LP v FCT –Commissioner appeals decision that sale of miner’s shares by non-resident was not assessable to Full Federal Court [54]

The Commissioner has lodged a notice of appeal to the Full Federal Court against the decision of Edmonds J in Resource Capital Fund III LP v FCT [2013] FCA 363. In that case, the Federal Court allowed a taxpayer’s appeal and held that it was not assessable on a capital gain of $58m it made on…

Re Carter v FCT – taxpayer seeks an extension of time in which to appeal to the Federal Court from ATO ‘benchmark’ based assessments [52]

The taxpayer has sought an extension of time in which to lodge an appeal against the decision in AAT Case [2013] AATA 141, Re Carter and FCT. In that case, the AAT dismissed the taxpayer’s appeal against income tax and GST assessments that were based on the application of the ATO’s small business benchmarks following…

Wickenby judgments deleted by courts because of Suppression orders [50]

Suppression orders issued by the NSW Supreme Court have seen the following judgments deleted: Agius v The Queen [2011] NSWCCA 119, NSW Court of Criminal Appeal, Ref No 794448. R v Agius (No 2) [2011] NSWSC 482, Supreme Court of New South Wales, Ref No 869106. R v Agius [2012] NSWSC 639, Supreme Court of…

*R v Sakovits – Jail sentences imposed on 2 company directors in dishonest tax avoidance case – 5 years with a minimum of 2.5 years [47]

Two taxpayers have been sentenced to jail terms by the NSW Supreme Court after being found guilty in February 2013 by a jury of dishonesty offences under s 29D and s 86 of the Crimes Act 1914 (Cth)  and under s 135.4(3) of the Criminal Code Act 1995 (Cth) for conspiring to defraud the Commonwealth in tax avoidance scheme. The…

*DCT v Chemical Trustee Limited (No 8) & Ors – Judgment for DCT of over $28m despite claims of abuse of process [40]

The Federal Court has given judgment for the Deputy Commissioner seeking to recover unpaid income tax from Chemical Trustee together with the shortfall interest charge and the general interest charge, totalling over $28m. (The matter relates to the ongoing litigation arising under ongoing Wickenby investigation and litigation). In giving judgment for the Commissioner, the Federal…

Re ZZGN and FCT – PRRT: deductibility of certain exploration expenditure [46]

In a 173-page decision concerning the deductibility of exploration expenditure under the Petroleum Resource Rent Tax Assessment Act 1987, the AAT has affirmed an objection decision by the Commissioner in part, to the extent he allowed the taxpayer a deduction for certain expenditure (Company C Billed Expenditure, Company A Direct Expenditure and Allocated Expenditure). The…

*Re Healy and FCT – Expenses incurred in annulling bankruptcy related to DPN not deductible [42]

The AAT has confirmed that accounting and legal expenses of over id=”mce_marker”00,000 incurred in connection with a former company director obtaining an annulment of his bankruptcy (which followed his failure to comply with a DPN) were not deductible under either s 8-1 or s 25-5 of the ITAA 1997. This was because the AAT found that the…

*Re Cancer and Bowel Research Association Incorporated as trustee for Cancer and Bowel Research Trust and FCT – DGR status denied and tax-exempt status referred back to the Commissioner [45]

In a lengthy judgment, the AAT has affirmed the Commissioner’s decision to revoke the endorsement of the Cancer and Bowel Research Trust as a tax deductible gift recipient, although remitted to the Commissioner the issue of whether the taxpayer was a health promotion charity. The Trust was established by deed made on 20 February 1998. The Commissioner…

*Re Heaney and FCT – $179k of ‘non-commercial’ farm losses could not be deducted against medical practitioner’s income under s35-55 discretion – too much debt [44]

The AAT has affirmed the Commissioner’s decision to not exercise his discretion in relation to non-commercial business losses of a taxpayer’s cattle and sheep farming activities for the 2010 income year. The taxpayer was a medical practitioner, who owned 2 farms, on which he conducted cattle breeding and sheep farming. In September 2010, he applied for a…

Fitzroy Services Pty Ltd v FCT – No deduction for interest on foreign loans and management fees – but time limit to amend [39]

A corporate taxpayer who claimed deductions for management fees of some $300,000 paid to associated companies for the 1999 to 2008 income years and for interest and bank charges of some id=”mce_marker”.8m paid to a foreign bank (the “Hua Wang Bank”) for the 2005 to 2009 has been unsuccessful in arguing that the outgoings were…