The taxpayer has appealed to the Federal Court against the decision in AAT Case [2014] AATA 622, Re Coshott and FCT. In that case, the AAT affirmed that a taxpayer was liable to CGT on a payment made to her in respect of the settlement of litigation she pursued for breach of contract and negligence. In doing so, the AAT dismissed the taxpayer’s claim that the payment of damages per se could not give rise to a profit or gain. It also found that she had failed to establish any relevant cost base for legal expenses that would otherwise reduce the assessable capital gain.
[LTN 184, 23/9/14]