*DCT v Ekelmans & Ors – Final asset freezing orders postponed as they were “without legitimate purpose” until recovery process identified [44]

The Supreme Court of Victoria has held that asset freezing orders obtained by a Deputy Commissioner of Taxation were “without a legitimate purpose”. The Deputy Commissioner had brought proceedings under r 37A of the Supreme Court (General Civil Procedures) Rules 2005 (Vic) for freezing orders over assets to the approximate value of assessments issued to…

*Re Vision Intelligence Pty Ltd and FCT – R&D outgoing not incurred: taxpayer liable for 25% shortfall penalties [43]

The AAT has held the R&D expenditure claimed by a taxpayer was not incurred in the year ended 30 June 2009 and as such it affirmed the Commissioner’s decision to disallow the deduction and impose a shortfall penalty. The taxpayer was an Australian resident company operating in the engineering and software development surveillance industry. It had entered…

*Re Fox and FCT – Work-related expenses deduction claim denied, but penalty remitted [38]

The AAT has affirmed the Commissioner’s objection decision concerning a taxpayer’s deduction claim for work-related expenses mainly for travel expenses, but held that the administrative penalty should be remitted to nil. The taxpayer was a truck driver and worked long shifts. He drove from his home in Adelaide to where he worked in Port Augusta.…

*Re Jakjoy Pty Ltd and FCT – CGT – properties used in ‘carrying on business’ of deriving rent not “active assets” – because of the ‘deriving rent’ exclusion [42]

The AAT has confirmed that the exclusion from the CGT small business concession in s 152-40(4)(e) of the ITAA 1997 for assets used “mainly to derive rent” applies (as intended) even if the assets are used in “carrying on a business” of a deriving rent. As a result, the AAT held that a range of commercial…

*Re Lambert and FCT – taxpayer’s plan to get negative gearing advantages through a discretionary trust fail [33]

The AAT has upheld the Commissioner’s decision to disallow the taxpayer’s claim for deductions for interest and bank fees of over id=”mce_marker”20,000 incurred [over 2 years] in relation to rental properties purchased by a family discretionary trust that had been set up for that purpose and of which he was the trustee. [The Taxpayer intended…

*Re Chowdary and FCT – Penalties imposed for failing to take reasonable care confirmed despite “honest mistake” [37]

The AAT (sitting as the Small Taxation Claims Tribunal) has confirmed the Commissioner’s decision to impose 25% shortfall penalties amounting to some id=”mce_marker”9,000 for “failing to take reasonable care” in respect of a taxpayer who, in completing his own tax returns over a 2-year period, claimed interest deductions of over $40,000 in respect of moneys…

*The Hunger Project Australia v FCT – Organisation that raises funds for charity in Australia a PBI for FBT purposes even though no direct relief in Australia [28]

The Federal Court has held that the Australian arm of a world-wide organisation operating out of the United States that aims at ending world hunger was a “public benevolent institution” (PBI) for the purposes of s 57A(1) of the FBTAA – with the result, that the provision of benefits to one of its employees was “exempt…

Oswal v FCT – CGT: Declaration over part of corpus of discretionary trust triggers CGT event E1: creation of (new) trust – not E5 ‘absolutely entitled’ event (because of the trustee’s lien) [32]

The Federal Court has held that the trustee of a discretionary trust who exercised a special power of “appointment” to make 2 beneficiaries of the trust absolutely entitled to part of the corpus of the trust (being certain shares held by the trust), triggered CGT event E1 (with the resultant CGT liability). This was despite…

*FCT v Messenger Press Proprietary Limited – News Group entitled to deduction for $2bn foreign exchange loss under old Div 3B on exchange of promissory notes [27]

In a decision handed down on Thur 25.7.2013, the Full Federal Court unanimously dismissed the Commissioner’s appeal from the decision in Messenger Press Proprietary Limited & Ors v FCT [2012] FCA 756 in which the Federal Court held that some 20 News Corp group companies were entitled to deductions for over $2bn in foreign exchange…