Yearly Archives: 2017

*Re Executor for the late Joan E Osborne and FCT – No share trading business operated through power of attorney – principal’s intentions relevant [30]

The AAT has held that a taxpayer, through persons appointed as her power of attorney (including her nephew), was not carrying on a business of share trading. As a result, the taxpayer was not entitled to a deduction for a trading loss of some $790,000 in the 2009 income year. In arriving at its decision,…

*Re Thomas and DCT – Serious hardship application fails [29]

A taxpayer has failed in his bid to be released from outstanding income tax liabilities on grounds of serious hardship. The taxpayer’s income tax related liabilities (including interest and penalties) totalled just over $40,000. His GST debts (including related interest charges and penalties) totalled almost $34,000, but the Commissioner’s power (under s 340-10 in Sch 1 TAA)…

*Re QHVV and FCT – Amended assessment to be amended to correct amount but 75% penalty affirmed for 2008 year with no return [28]

The AAT has remitted a matter to the Commissioner with the direction that a taxpayer be assessed for the 2008 income year as having a taxable income of id=”mce_marker”26,301 and being liable to tax of $37,620.40, together with any necessary adjustment to penalty and interest. It also affirmed a 75% administrative penalty that had been…

Credit for tax withheld and deductions for work-related expenses disallowed [27]

The AAT has affirmed the Commissioner’s decision to disallow tax withheld and various work-related expenses claimed by a taxpayer. It also affirmed the 25% shortfall penalty imposed by the Commissioner for failing to take reasonable care. The taxpayer was a computer programmer who was both an employee and a director of a company. For the…

*SPI PowerNet Pty Ltd v FCT – Taxpayer wins claim for deductions for copyright re purchase of Victorian electricity business [26]

The Federal Court has set aside the Commissioner’s decision on the basis on which copyright deductions could be claimed by the taxpayer and ordered that the matter be remitted to the Commissioner for re-determination in accordance with its own basis on which the deduction should be claimed. The deductions were claimed by the taxpayer under…

*FCT v Dowling – Court finds AAT “fell into error” in disregarding excess super contributions under the ‘special circumstances’ provisions in s292-465 [25]

In a test case funded by the ATO, the Federal Court has set aside an AAT decision after finding that it “fell into error” in the way it applied the Commissioner’s discretion to disregard certain excess non-concessional superannuation contributions. In doing so, the Court provided some detailed guidance on the statutory construction and application of…

Borcherdt v FCT – Disallowance of fuel tax credit claims largely upheld [24]

The Federal Court has largely upheld an AAT decision to disallow taxpayers’ claims for fuel tax credits. The taxpayers in partnership conducted a sawmilling business in northern NSW. One of the partners also conducted a separate sawmilling business and a farming business on his own property in northern NSW. The partner and the partnership both…

*ATS Pacific Pty Ltd v FCT – GST: Supplies to non-resident travel agents fully taxable – no GST-free element for ‘arranging’ services to foreign travel agent [23]

The Full Federal Court has unanimously upheld the Commissioner’s argument that a supply made by an Australian inbound tour operator to overseas customers was fully subject to GST. At first instance, the Federal Court held that the supply of a promise to provide travel products (such as hotel rooms, airport transfers etc) to non-resident tourists…

*Rigoli v FCT – Onus of showing assessments excessive not discharged by accepting FCT’s calculation but for depreciation – remitted back to AAT [22]

A taxpayer has been unsuccessful before the Full Federal Court in a matter concerning default assessments that had been issued under s 167 of the ITAA 1936 for the 1994 to 2001 income years. In an earlier decision, the Federal Court had remitted the matter to the AAT for redetermination. The Federal Court held the taxpayer…

*Chemical Trustee Limited v DCT – Wickenby: taxpayer loses because estoppel, res judicata and abuse of process claims rejected [21]

The Full Federal Court has upheld a decision giving judgment to a Deputy Commissioner for unpaid income tax, together with the shortfall interest charge and general interest charge, totalling over $28m. [The matter relates to ongoing litigation arising under Project Wickenby in relation to transactions involving the Hua Wang Bank and others.] These proceedings (the…