Monthly Archives: March 2017

*Leighton v FCT – ATO accepts that it was the non-resident companies who derived income from the sale of the shares held as trading stock (and the nominee held the proceeds from that sale, not income) [R2]

The ATO on Mon 19.3.2012, released a Decision Impact Statement on the Full Federal Court’s decision in Leighton v FCT [2011] FCAFC 96. In that case, the Full Federal Court held that a non-resident individual was not liable to be assessed under the former s 98(3) of the ITAA 1936 in relation to trading activities…

*Newton case – Workers were employees for SGC purposes [R1]

The ATO on Thur 8.3.2012, released a Decision Impact Statement on the decision in AAT Case [2011] AATA 897, Re Newton (t/as Combined Care for the Elderly) and FCT. In that case, the AAT affirmed that the taxpayer was liable to super guarantee charge (SGC) as the workers in question were not independent contractors and…

FCT v Interhealth Energies Pty Ltd as Trustee of the Interhealth Superannuation Fund – breach of enforceable undertaking to pay amount to member [C18]

The taxpayer has appealed to the Full Federal Court against the decision of Logan J in FCT v Interhealth Energies Pty Ltd as Trustee of the Interhealth Superannuation Fund [2012] FCA 120. The Federal Court had found a corporate trustee of an SMSF had breached an enforceable undertaking under the SIS Act and ordered it…

*Hansen Yuncken Pty Ltd v Ian James Ericson trading as Flea’s Concreting & Anor – Garnishee notice only gives charge over debt (while it exists) which does not follow the funds when paid into court [C17]

The Supreme Court of Queensland has held that a garnishee notice issued under s 260-5 of the TAA in respect of a debt owed by a third party to a taxpayer, does not give the Commissioner a proprietary interest in the debt. Instead, the Court found that the Commissioner has a statutory charge over the…

Milne v R – Appeal against conviction and jail sentence for tax fraud dismissed [C16]

The NSW Court of Criminal Appeal has dismissed a taxpayer’s appeal against his conviction and sentencing for money laundering and tax fraud offences. The Court said that, in November 2010, the appellant was found guilty by a jury in the NSW Supreme Court on one count of “money laundering”, contrary to s 400.3(1) of the…

*DCT v Karas and Ors – Taxpayers obtain variation of freezing orders to allow payment of legal fees [C15]

An individual taxpayer and related companies have been successful in obtaining a variation to freezing orders under O 37A of the Supreme Court (General Civil Procedure) Rules (Vic) to enable them to mortgage a property subject to the freezing orders as security for a loan of $250,000 to pay legal fees. The Commissioner resisted the…

Re Sobel Investments Pty Ltd and FCT – Expenses in buying, maintaining and selling properties not established in response to default assessments [C14]

The AAT has held the taxpayer failed to discharge the onus of proof in relation to the deductibility of expenses incurred in buying, renovating, and selling properties for the income years ending 30 June 2003 and 30 June 2004. The taxpayer was incorporated in 1995 and was in the business of buying and selling properties.…

AAT Case [2012] AATA 178 – Supermarket business fails to prove assessments for 10 years excessive [C13]

A taxpayer, both the trustee and a beneficiary of a family trust that operated independent supermarkets has been unsuccessful in discharging the onus of proof that amended assessments issued by the Commissioner for the 1993 to 2003 income years were excessive. The assessments were issued on the basis that the taxpayer was engaged in alleged…

*Re Munnery and FCT – “Preservation payment” not part of cost base of shares acquired under ESS [C12]

The AAT has ruled that a “preservation payment” made under an Employee Share Scheme (ESS) to supposedly keep the shares in the scheme once the restrictions on them had been lifted, did not form part of the cost base of the shares for the purpose of determining the “deferred” amount to be included in the…

AAT Case [2012] AATA 174 – Rental property deductions: Commissioner’s decision partly affirmed [C11]

The AAT has partly affirmed the decision of the Commissioner to disallow additional deductions in relation to a rental property as the taxpayer was not able to substantiate some of the claims. The taxpayer owned various rental properties in regional NSW, the present case concerned one of the properties which had been vacant for 5…