Category Archives: Tax Month – July 2013

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…

*Re WJBS & Anor and FCT – Payment from ex-husband’s company was assessable income [41]

The AAT has affirmed the Commissioner’s decision that money received by a taxpayer was assessable income in the taxpayer’s hands. The taxpayer argued the money (id=”mce_marker”.6m) she received from a company run by her (then) husband in the 2007-08 income year was provided to her as part of a domestic arrangement under which she accessed…

*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…

*Re Home Health Pty Ltd and FCT – Pty Ltd company with only 2 shareholders was not an ‘institution’ and thus not a PBI and not tax-exempt [36]

The AAT has held that Home Health Pty Ltd (Home Health) was not a “public benevolent institution” for the purposes of endorsement as an income tax exempt entity under Div 50 of the ITAA 1997. Home Health is a proprietary limited company that was incorporated on 9 June 1997 and trades under the name “Tender Care”. The AAT…

*Hancox v FCT – court confirms that allowance was a LAFHA and therefore no deductions claimable against it and 50% penalties unappealable [31]

The Federal Court has held that the AAT in AAT Case [2012] AATA 836, Hancox and FCT had not erred in finding that a taxpayer, who was employed by a mining company at Port Hedland on a fly-in fly-out basis, was not in receipt of a travel allowance of some $20,000 as he claimed, but…

*Collection Point Pty Ltd v FCT – FOI request denied – no obligation to create new computer program to produce document [26]

In a decision handed down on Wed 3.7.2013, the Full Federal Court has unanimously dismissed the taxpayer’s appeal from the decision in Collection Point Pty Ltd v FCT [2012] FCA 720 and confirmed that the Commissioner was not obliged to provide access to a document requested by the appellant under the FOI Act. The appellant,…

*Re Fay and FCT – Release of taxpayer from tax debt on “serious hardship” grounds denied [40]

The AAT has declined a taxpayer’s request for review of the Commissioner’s decision not to release her from an income tax liability. The taxpayer had sought review of the Commissioner’s decision not to release her from an income tax liability totalling almost $50,000 pursuant to s 340-5 of Sch 1 to the TAA for the reason that…

*Re Pillay and FCT – Taxpayer worked in East Timor for 9-11 months but was resident in Australia because of his continuity of association in other months [35]

The AAT has held that a taxpayer was a “resident of Australia” during the relevant years. The taxpayer was a doctor who had been working outside Australia since 2006. In October 2011, the taxpayer sought a private ruling from the Commissioner to declare him a non-resident of Australia for the 2010, 2011 and 2012 income years (“the…

*McCarthy v FCT – Federal s39B matter not transferred to the NSW Supreme Court where criminal proceedings were instituted but it was stood over [30]

In a complex procedural matter, the Federal Court has refused the application of 2 taxpayers to transfer the whole or part of their proceedings to the NSW Supreme Court. At the same time, it held that the taxpayers’ applications to have assessments set aside should be stood over generally in the circumstances. The taxpayers brought…

*Fowler v FCT – Share option rights acquisition date was not on making employment contract but later on shareholder approval of options [25]

In a decision handed down on Wed 3.7.2013, the Full Federal Court has unanimously dismissed a taxpayer’s appeal, and held that for the purposes of the former ITAA 1936 employee share scheme (ESS) provisions (Div 13A), a taxpayer acquired a right with respect to share options approximately 2 months later than when he contended he acquired…