In a decision handed down on Wed 17.10.2012, the AAT has held that a taxpayer was entitled to deductions for General Interest Charge (GIC) accrued on amounts for each year to which the GIC was referable.
The Tribunal said the case was the culmination of a number of years of legal disputation involving the taxpayer, a number of members of his family and the ATO. The only relevant matter that is left for finalisation was the question as to the timing of the deduction for the payment of the GIC. The GIC notices that were issued in the case related to the income years 2003 through to and including 2008 and totalled over $168,000.
The Tribunal’s view was that the ability of the Commissioner to remit GIC under s 8AAG of the TAA did not prevent the GIC from being a present legal obligation. Unless and until it is so remitted, the AAT said the GIC remains a present legal obligation on each and every day on which tax should have been paid. Accordingly, the Tribunal considered the GIC is incurred and therefore deductible in the year to which it is referable.
The Tribunal therefore set aside the Commissioner’s decision to disallow the deductions for GIC accrued amounts in the years to which the GIC was referable, and substituted a decision that the taxpayer was entitled to deductions for the GIC accrued amounts for each year to which the GIC was referable.
(AAT Case [2012] AATA 719, Re Nash and FCT, AAT, Deutsch DP, AAT Ref: 2010/2053-2060, 17 October 2012.)
[LTN 201, 17/10]