The taxpayers have appealed to the Federal Court against the decision in AAT Case [2014] AATA 423, Re Yazbek and FCT. In the case, the AAT dismissed applications from husband and wife taxpayers and found that they were each assessable on dividends of some id=”mce_marker”.8m that they did not return in their assessable income. In doing so, the AAT dismissed the taxpayers’ argument that the shares in a family company that gave rise to the dividend income had been transferred to a family partnership as initial capital and that as a result, they had not derived the dividend income themselves. In particular, the AAT found that the relevant partnership agreements did not have the effect of transferring the ownership of the shares to the family partnership and that therefore the shares did not become partnership property.
[FJM Note: This was because they were trying to avoid CGT event A1 on transferring ownership of the shares – see discussion above under ‘AAT Cases’.]
[LTN 143, 28/7/14]