The High Court has granted the taxpayers special leave to appeal against the Full Federal Court decision in Bywater Investments Ltd & Ors v FCT [2015] FCAFC 176. The Full Federal Court had dismissed the taxpayers’ appeals from 2 Federal Court decisions that had held the taxpayers were residents of Australia for tax purposes and were liable to pay income tax in Australia on profits made from the sale of shares.

[LTN 85, 55/16]

Extract from FFC decision

Citation: Bywater Investments Limited v Commissioner of Taxation   [2015] FCAFC 176 
Appeal from: Hua Wang Bank Berhad v Commissioner of Taxation  [2014] FCA 1392
Hua Wang Bank Berhad v Commissioner of Taxation (No 19) [2015] FCA 454
Parties: BYWATER INVESTMENTS LIMITED, CHEMICAL TRUSTEE LIMITED and DERRIN BROTHERS PROPERTIES LIMITED v COMMISSIONER OF TAXATION

HUA WANG BANK BERHAD v COMMISSIONER OF TAXATION

File numbers: NSD 71 of 2015
NSD 76 of 2015
Judges: ROBERTSON, PAGONE AND DAVIES JJ
Date of judgment: 11 December 2015
Catchwords: INCOME TAX – whether companies residents of Australia – place of central management and control – relevant principles

INCOME TAX – profits from sale of shares – whether on revenue or capital account – where shares agreed to be trading stock

INCOME TAX – trading stock – construction of s70-40(2) of the Income Tax Assessment Act 1997 (Cth) – whether items taken into account for purposes of Division 70 – relevant principles

INCOME TAX – shares – whether proved to be held beneficially