Category Archives: Tax Month – November 2012

Re Rigoli and FCT – Depreciation deductions on some capital items allowed [32]

A taxpayer has been partially successful before the AAT in relation to claims for depreciation for certain items of plant and equipment by a partnership (of which the taxpayer was found to be a partner). The AAT found that those items of plant and equipment were used in the business conducted by the partnership, being…

*Re Building Company Owner and FCT – Discretion to disregard Div 7A not exercised in 2005, but was exercised in 2006 and 2007 for not properly documenting loans [31]

The AAT has exercised the discretion to disregard the operation of Div 7A on the grounds there was an honest mistake in not properly documenting loans by a private company to a shareholder. The taxpayer was a shareholder and director of a building company. In the 2005 income year, the company transferred money to the…

Federal Circuit Court (Consequential Amendments) Bill introduced [30]

The Federal Circuit Court of Australia (Consequential Amendments) Bill 2012 was introduced in the House of Reps on Wed 28.11.2012. It will operate together with the Federal Circuit Court of Australia Legislation Amendment Bill 2012, and makes consequential amendments to Commonwealth legislation to reflect changes to the name of the Federal Magistrates Court and the…

The Federal Magistrates Court will be re-named the Federal Circuit Court under the Federal Circuit Court of Australia Legislation Amendment Bill 2012 [29]

The Federal Circuit Court of Australia Legislation Amendment Bill 2012 has now passed all stages without amendment and awaits Royal Assent. The Bill will amend the Federal Magistrates Act 1999 and other legislation to rename the Federal Magistrates Court as the Federal Circuit Court of Australia, and to change the title of Chief Federal Magistrate…

DCT v Chemical Trustee Limited (No 7) – Taxpayers’ notices to DCT to produce documents mostly set aside [28]

The Federal Court has largely set aside notices to produce documents served by the taxpayer on a Deputy Commissioner of Taxation. On 25 September 2012, the solicitors for the taxpayer served a notice to produce documents on the solicitors for the Deputy Commissioner of Taxation.  The notice sought various documents and communications. The Deputy Commissioner…

*Kahn v FCT – Judiciary Act claim for credits in relation to PAYG withheld but not remitted dismissed as an abuse of process [27]

The Federal Court has dismissed a proceeding where a taxpayer sought relief under the Judiciary Act 1903 concerning the Commissioner’s disallowance of credits for PAYG tax. The taxpayer sought relief under s 39B of the Judiciary Act, claiming that a declaration that the Commissioner’s decision to refuse to allow him a credit in respect of…

*Visy Packaging Holdings Pty Ltd v FCT – Visy entitled to deduction for losses on resale of non-packaging businesses acquired from Southcorp [26]

The Federal Court has held that the taxpayers, which were part of the Visy group of companies (and were ultimately owned by the Pratt Group), were entitled to a deduction, under s 8-1 of the ITAA 1997, for losses of some $75m, realised on the sale of a range of businesses. The Court arrived at…

*Queensland Maintenance Services Pty Ltd v FCT – In ADJR action, a reduced garnishee order was held reasonable – only 20% of the $10m owed to the taxpayer [25]

The Full Federal Court has unanimously dismissed an appeal by the taxpayer, who owed the Commissioner more than $28.6m, in relation to the Commissioner’s decision to re-issue a third party garnishee notice under s 260-5 of Taxation Administration Act 1953 that only required a third party debtor to pay 20% of the $10m it owed…

*FCT v Crown Insurance Services Ltd – Court agrees that the ‘source’ of income is not a question of law that can be appealed from the AAT [24]

In a majority decision, the Full Federal Court has dismissed the Commissioner’s appeal from a 2011 AAT decision that held that premium income derived by a non-resident insurance company was not sourced either directly or indirectly from Australia and was therefore not assessable to the company. Before the AAT, in AAT Case [2011] AATA 847,…

*Mills v FCT – Taxpayer wins High Court appeal that Pt IVA does not apply to PERLS V Securities franking credit scheme [23]

In a decision handed down this on Wed 14.11.2012, the High Court unanimously allowed the taxpayer’s appeal against a decision of the Full Federal Court and set aside a determination of the Commissioner that no franking credit was to arise in respect of distributions made on certain securities issued by the Commonwealth Bank. The Court…