John Morgan is a tax specialist lawyer of more than three decades experience now practicing at the Victorian Bar - w: www.FJMtax.com e: f.john.morgan@vicbar.com.au

*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…

*Re Nordern and FCT – Taxpayer was a resident (overseas 200 days in one year, jointly owned house in Australia occupied by wife and children, which he visited on leave and salary paid into Australian account) [41]

The AAT has held that a taxpayer was a resident of Australia for tax purposes in the year ended 30 June 2011 and did not discharge the onus of proving that an assessment issued to him was excessive. The taxpayer was born in Australia and is an Australian citizen and owns a residence in joint tenancy with…

Caporale v DCT – Application seeking stay, based on the Commissioner’s alleged failure to follow the “Model Litigant” policy, dismissed [38]

The Federal Court has dismissed an application for interlocutory relief by a self-represented taxpayer to stay enforcement of any judgment and current legal proceedings in relation to her dispute with the Commissioner in regard to the AAT’s decision to affirm the Commissioner’s objection decision concerning assessable income from a family petrol station business and a…

*Sent v FCT – High Court refuses taxpayers application for leave to appeal the decision that he had derived the bonuses he directed to a share trust [36]

The High Court has refused the taxpayer’s application for special leave to appeal against the decision of the Full Federal Court in Sent v FCT [2012] FCAFC 187. The Full Federal Court had dismissed the taxpayer’s appeal and held that the full amount of accrued and unaccrued bonus entitlements of id=”mce_marker”1.6m that were instead paid…

*Sanctuary Lakes Pty Ltd v FCT – Full Court confirms denial of $18m deductions in restructure of golf resort complex [37]

The Full Federal Court has unanimously dismissed the taxpayer’s appeal on the substantive issue from the decision in AAT Case [2012] AATA 404, Re Sanctuary Lakes Pty Ltd and FCT. In that case, the AAT confirmed that a taxpayer was not entitled to deductions for over id=”mce_marker”8m in relation to a range of outgoings incurred…

*R&D tax incentive changes – draft legislation to limit the non-refundable tax offset to companies with aggregate assessable income under $20bn [29]

The Government on Tue 7.5.2013, released draft legislation designed to better target access to the R&D tax incentive. The proposed change would target support to companies with aggregate assessable income of less than $20 billion. The change would add a third tier to the R&D tax incentive [see EM extract below] whereby companies with aggregate…