Category Archives: Tax Month – March 2012

Re Sobel Investments Pty Ltd and FCT – Expenses in buying, maintaining and selling properties not established in response to default assessments [C14]

The AAT has held the taxpayer failed to discharge the onus of proof in relation to the deductibility of expenses incurred in buying, renovating, and selling properties for the income years ending 30 June 2003 and 30 June 2004. The taxpayer was incorporated in 1995 and was in the business of buying and selling properties.…

AAT Case [2012] AATA 178 – Supermarket business fails to prove assessments for 10 years excessive [C13]

A taxpayer, both the trustee and a beneficiary of a family trust that operated independent supermarkets has been unsuccessful in discharging the onus of proof that amended assessments issued by the Commissioner for the 1993 to 2003 income years were excessive. The assessments were issued on the basis that the taxpayer was engaged in alleged…

*Re Munnery and FCT – “Preservation payment” not part of cost base of shares acquired under ESS [C12]

The AAT has ruled that a “preservation payment” made under an Employee Share Scheme (ESS) to supposedly keep the shares in the scheme once the restrictions on them had been lifted, did not form part of the cost base of the shares for the purpose of determining the “deferred” amount to be included in the…

AAT Case [2012] AATA 174 – Rental property deductions: Commissioner’s decision partly affirmed [C11]

The AAT has partly affirmed the decision of the Commissioner to disallow additional deductions in relation to a rental property as the taxpayer was not able to substantiate some of the claims. The taxpayer owned various rental properties in regional NSW, the present case concerned one of the properties which had been vacant for 5…

*AAT Case [2012] AATA 142 – Employee correct that he had ‘rights’ to options to acquire shares in his employer on starting work, not later on issue of the options (under old provisions) [C10]

The AAT has held the taxpayer applied the correct acquisition date in relation to options acquired under an employee share scheme, and therefore was not subject to a shortfall amount or penalties as assessed by the Commissioner for the income year ended 30 June 2004. The taxpayer was granted options in a company as a…

Re Kalafatis and FCT – AAT hearing on assessability of a capital gain, deferred pending Supreme Court proceedings challenging transfers of land [C9]

The AAT has agreed to defer proceedings before it in relation to the assessability of a capital gain of $100,000 which the taxpayer claimed was incorrectly returned and lodged without his consent by the family accountant. In particular, the AAT ruled that the hearing should be deferred pending the outcome of Supreme Court action in…

*Market Nominees Pty Ltd v FCT – Existing fixed charge over debt has priority over later garnishee notice [C8]

The Federal Court has held that a garnishee notice under s 260-5 of the TAA served on a debtor (“G8”) of one of the applicants (“Local Kids”) was subject to an earlier fixed charge over the debt given to the other applicant, a related party (“Market Nominees”), and that therefore the fixed charge took priority…

Kolya v Tax Practitioners Board – No error of law in decision to refuse to grant tax agent registration – not a ‘fit and proper’ person [C6]

The Federal Court has dismissed the applicant’s appeal from the decision of the AAT in AAT Case [2011] AATA 804, Re Kolya and Tax Practitioners Board which affirmed the decision of the Tax Practitioners Board to reject his application for transitional registration as a tax agent on the basis he was not “a fit and…

*Australia and New Zealand Banking Group Limited v Konza – Section 264 notices served on Australian bank, about clients of their Vanuatu subsidiaries, held to be valid [C5]

In a lengthy decision handed down on Fri 9.3.2012, the Federal Court has held that notices issued by the ATO under s 264 of the ITAA 1936 to Australia and New Zealand Banking Group Limited were valid. The bank had been issued with 2 notices requiring it to provide certain information about customers who have…

*Consolidated Media Holdings Limited v FCT – Appeal allowed: consideration for off-market share buy-back was a rebateable dividend [C4]

The Full Federal Court has unanimously overturned the decision at first instance in Consolidated Media Holdings Limited v FCT [2011] FCA 367 and held that an off-market share buy-back transaction did not generate a capital gain of some $400m to the taxpayer. It instead found that the consideration for the buy-back was not capital proceeds…