Category Archives: Tax Month – February 2015

*Hua Wang Bank Berhad & Ors v FCT – taxpayers appeal Court’s decision that they were resident and taxable on sale of ASX listed shares [19]

The taxpayers have appealed to the Full Federal Court against the decision in Hua Wang Bank Berhad & Ors v FCT [2014] FCA 1392. In that case, the Federal Court found the 5 companies were resident of Australia and liable to pay tax here on the proceeds of the sale of shares in ASX listed…

*Re Wu and FCT – Australian resident Chinese citizen discloses only Australian, not foreign, business income – appeal succeeds on 1 issue [18]

A taxpayer has been partially successful before the AAT in arguing that amended assessments for the 2009 to 2012 income years were excessive. The AAT heard the taxpayer is a citizen of China and became a resident of Australia in 2005. It also heard the taxpayer had business dealings in Australia, China and Malaysia. The…

*Re Caporale and FCT – GST and default ITX assessments upheld – no enterprise and explanations inadequate [17]

The AAT has disallowed a taxpayer’s appeal against GST and s 167 default income tax assessments, although it set aside an administrative penalty for one of the years in question. In 2008, the ATO audited the tax affairs of the taxpayer’s family and the companies they controlled. The Tribunal said the family business in question was…

*Re CZRS and FCT – Employer’s lump sum paid for negotiated resignation was fully assessable as an ETP and was not a ‘bona fide redundancy payment’ [16]

The AAT has concluded that a lump sum payment received by an individual taxpayer was an employment termination payment (ETP) under s 82-130(1) of the ITAA 1997 and was not a genuine redundancy payment under s 83-175 of the ITAA 1997. As a result, the AAT affirmed the taxpayer was liable to income tax on the full…

*Re Track and Ors and FCT – Pt IVA applies to scheme to qualify for CGT small business concessions [15]

The AAT has confirmed that Pt IVA applied to a scheme carried out by taxpayers in order to enable them to qualify for the CGT small business concessions via the maximum net asset value (MANV) test. Interestingly, the taxpayers argued before the AAT (contrary to their original position in their lodged tax returns) that various…

LHRC & Ors v DCT (No 4) – but taxpayers obtain “confidentiality orders” re parties’ identities, documents, etc [14]

In a [decision related to the (No. 3) case above], the Federal Court granted the [same] taxpayers’ application for “confidential[ity] orders” in relation to the identity of the parties, the contents of any documents filed or tendered in the proceedings and the non-disclosure of the transcript of any hearing in the proceedings to anyone other…

*LHRC & Ors v DCT (No 3) – Wickenby case: Evidence from ACC examination can be used by ATO in s 264 interview [13]

The Federal Court has dismissed a taxpayer’s application to prevent ATO officers who were to conduct an interview of him under s 264 of the ITAA 1936 from using evidence he had previously given in an examination by the Australian Crime Commission (ACC) in relation to a Project Wickenby investigation. The taxpayer, a director of an…

*Rio Tinto Services Ltd v FCT – Taxpayer fails to get ‘input tax credits’ for provision of remote area residences to mining staff [12]

In a test case decision handed down [on Thursday 19.2.2015], the Federal Court has dismissed a taxpayer’s appeal concerning its entitlement to input tax credits (ITCs) for certain acquisitions relating to mining accommodation in WA. The taxpayer, Rio Tinto Services Ltd, is the representative member for the Rio Tinto Ltd GST group, which includes Hamersley…

*Financial Synergy Holdings Pty Ltd v FCT – Consolidation: ACA for shares with deemed pre-CGT acquisition date under rollover is their market value on 19.9.85 (not at ‘joining time’) [11]

The Federal Court has held that for the purposes of determining the “allocable cost amount” (or cost base) of an asset that came to be owned by a consolidated group on consolidation – in circumstances where the asset was originally a pre-CGT asset that had been subject to a roll-over that preserved its pre-CGT status…

*Krok v FCT – privilege in legal advice impliedly waived by disclosing its ‘gist’ for forensic advantage which otherwise could not be tested [10]

The Federal Court has found that a taxpayer had impliedly waived his right to legal professional privilege in relation to legal advice he had obtained, which he partially disclosed in sworn affidavits to support his appeal against assessments raised by the Commissioner. The assessments related to offshore transactions involving tax havens and the creation of…