The AAT has affirmed the Commissioner’s decision that money received by a taxpayer was assessable income in the taxpayer’s hands.
The taxpayer argued the money (id=”mce_marker”.6m) she received from a company run by her (then) husband in the 2007-08 income year was provided to her as part of a domestic arrangement under which she accessed her husband’s income, or was a gift, and therefore the amounts were not assessable in her hands. The Commissioner submitted the taxpayer financed her husband’s business for which she expected an income stream. The Commissioner raised an assessment and imposed administrative penalty at 50% on the basis that the taxpayer was “reckless”.
The AAT held the payments were properly characterised as “income according to ordinary concepts” within the meaning of s 6-5 of the ITAA 1997. The AAT found the taxpayer “was an investor who expected and received a return on the investment she made…”. The AAT also affirmed the imposition of penalties at 50% and held there was no basis for remission.
(AAT Case [2013] AATA 518, Re WJBS & Anor and FCT, AAT, Ref: 2012/0173, 2013/1482, McCabe SM, 23 July 2013.)
[LTN 141, 24/7/13]