Sharpcan Pty Ltd – High Court finds for Commissioner holding that expenditure on ‘gaming machine entitlements’ was capital and not s8-1 deductible or s40-880 amortisable as ‘black hole’ expenditure

On 16 October 2019, the High Court unanimously allowed an appeal from a judgment of the Full Court of the Federal Court of Australia concerning the Commissioner of Taxation v Sharpcan Pty Ltd [2019] HCA 36. This concerns the deductibility, under the Income Tax Assessment Act 1997 (Cth) (“the 1997 Act“), of payments to acquire gaming machine entitlements (“GMEs”) under the Gambling Regulation Act 2003 (Vic).

See below for a summary of the facts, issues and the result.