Category Archives: Tax Month – November 2012

*Re Nash v FCT – Commissioner appeals AAT decision that GIC is deductible in the period to which it is referable (not the period in which it is imposed) [42]

The Commissioner has lodged a notice of appeal to the Federal Court against the decision of Deutsch DP in AAT Case [2012] AATA 719, Re Nash and FCT. In that case, the AAT held that the taxpayer was entitled to deductions for General Interest Charge (GIC) accrued amounts for each year to which the GIC…

*Pratt Holdings Proprietary Limited v FCT – taxpayer appeals decision to disallow loss generated from sale of mining exploration tenements [41]

The taxpayer has lodged a notice of appeal to the Full Federal Court against the decision of Gordon J in Pratt Holdings Proprietary Limited v FCT [2012] FCA 1075. In that case, the Federal Court held that the taxpayer was not entitled to deduct a loss transferred to it from a related joint venture company…

DCT v Power – Validity of DPNs for $1m upheld – resigning as a director didn’t assist, notice didn’t need to cite Div 269 and didn’t need separate notices [40]

The NSW Supreme Court has upheld the validity of Directors’ Penalty Notices issued to a company director in respect of unpaid PAYG liabilities of close to $1m (including interest) incurred during periods in 2010 and 2011. The director sought to challenge the notices on 3 grounds – namely:  (1) for failing to state that he…

Hancox and FCT – $20k Allowance was a LAFHA, exempt as a fringe benefit, so $36k of deductions not allowable [39]

The AAT has held that a taxpayer, who was employed by a mining company at Port Hedland in Western Australia on a fly-in fly-out basis (ie as a “distant work employee” under the relevant work agreement), was in receipt of a living-away-from-home allowance (LAFHA) of some $20,000 in the 2009-10 income year pursuant to s…

Re Lack and FCT – Commissioner not out of time to issue assessments – sham conceded by taxpayers [38]

Husband and wife taxpayers who conceded that a “profit-washing” arrangement they entered into was a “sham” have been unsuccessful before the AAT in arguing that amended assessments were issued out of time and that 50% shortfall penalties for recklessness should have been remitted. The taxpayers operated a successful grain growing business in partnership and took…

Re Watsford and FCT – ESS: share options issued under a settlement were not new and the discount was assessable in the previous year [37]

The AAT has held a taxpayer was required to include a discount from the market value of shares he acquired on the exercise of options under an employee share scheme (ESS) in the 2007 year. It also upheld the Commissioner’s decision to impose a 25% shortfall penalty for failure to take reasonable care. The taxpayer…

Re Neimanis and FCT – Tax debt not released on hardship grounds despite tax payer having few assets in his name as his wife had assets [36]

The AAT has affirmed the Commissioner’s decision to refuse to release a taxpayer from an income tax and PAYG instalment debt pursuant to s 304-5 of the TAA as it considered the taxpayer would not suffer serious hardship. The taxpayer was a retired solicitor who had been in practice since 1979. He sought a release from…

Re Bezuidenhout and FCT – Taxpayer was a resident of Australia; assessable on foreign income [35]

The AAT has held a taxpayer was a resident of Australia within the meaning of s 6(1) of the ITAA 1936 for the 2006 to 2008 income years. Accordingly, it affirmed the Commissioner’s decision to assess the taxpayer on various foreign income earned in the relevant periods. The taxpayer migrated to Australia in 2005 with his…

Re Daniels and FCT – Taxpayer liable for $129k of CGT on disposal of Panamanian shares and a 50% shortfall penalty [34]

The AAT has affirmed the Commissioner’s decision that a taxpayer was liable for a capital gain made on disposal of shares in a Panamanian company for the 2006-07 income year. In addition, it also affirmed the 50% shortfall penalty imposed by the Commissioner. The Commissioner commenced an audit of the taxpayer’s affairs and associated entities…

Re The Employed Accountant and FCT – Taxpayer not assessable on bank deposits [33]

The AAT has held that a taxpayer satisfied the burden of proof that certain deposits to his bank account were not assessable to him. In addition, it held that interest paid on loans for investment properties were deductible to the taxpayer. However, the AAT held that the taxpayer was liable to an administrative penalty of…