TAXES AND DUTIES — Dutiable transactions — Dutiable property — Declaration of trust – The duties assessment in respect of the declaration of trust is confirmed.
[2023] NSWCATAD 5 (09 January 2023) (S E Frost, Senior Member)
Review of taxation – Calderbank offer – Scope of item 37 – Application for review allowed.
[2023] WADC 4 (20 January 2023) (Tovey DCJ)
Commissioner of Taxation v Guardian AIT Pty Ltd ATF Australian Investment Trust
TAXATION – appeal from judgment of a single judge to set aside taxation decision under Part IVC of the Taxation Administration Act 1953 (Cth) (TAA 1953) – application of s 100A of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) – whether primary judge erred in holding that present entitlement to trust income did not arise out of a reimbursement agreement or by reason of any act, transaction or circumstance in connection with or as a result of ‘reimbursement agreement’. TAXATION – appeal from judgment of a single judge to set aside taxation decision under Part IVC of the TAA 1953 – application of Part IVA of the ITAA 1936
Lead judgement – Hespe J.
- This is an appeal from a judgment of this Court in relation to the application of s 100A and Part IVA of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) to distributions made by Guardian AIT Pty Ltd (Guardian) as trustee for the Australian Investment Trust (AIT) to AIT Corporate Services Pty Ltd (AITCS), a corporate beneficiary.
- The Appellant (Commissioner) assessed Guardian as trustee for the AIT for the 2012 to 2014 income years under s 100A and s 99A (QUD 36/2022). In the alternative, the Commissioner made determinations under Part IVA and assessed Mr Alexander Kurt Springer (Mr Springer) in each of those income years to the amounts appointed to AITCS (QUD 37/2022). At first instance, the learned primary judge held that s 100A did not apply in any of the income years in question. His Honour also held that Part IVA did not apply in any of those years on the basis that there was no tax benefit and, if there were a tax benefit, that the requisite dominant purpose was not to obtain the tax benefit.
- The Commissioner does not appeal the primary judge’s decisions in relation to the 2014 income year.
- The Commissioner’s Notices of Appeal raise two grounds.
(1) The first ground relates to the primary judge’s conclusion regarding the application of s 100A for the 2013 income year only. The Commissioner contends that the primary judge erred in holding that the present entitlement of AITCS to a share of the income of the AIT for the 2013 income year did not arise out of a reimbursement agreement or by reason of any act, transaction or circumstance that occurred in connection with, or as a result of, a reimbursement agreement. Instead, the primary judge ought to have held that an understanding existed (particularised at first instance as the 2013 Understanding and explained further at [78], below) which constituted a reimbursement agreement; and AITCS’s present entitlement to a share of the income of the AIT for the 2013 income year arose out of the 2013 Understanding or arose by reason of an act, transaction or circumstance that occurred in connection with, or as a result of, the 2013 Understanding. The Commissioner does not appeal the primary judge’s finding that s 100A did not apply in the 2012 income year.
(2) The second ground relates to the primary judge’s conclusion in respect of the application of Part IVA for the 2012 and 2013 income years. The Commissioner contends that the primary judge erred in holding that there was no scheme to which Part IVA applied, but instead ought to have held that Part IVA applied to what were referred to in the primary judge’s reasons as the “2012 related Scheme” and the “2013 related Scheme”.
- For the reasons set out below, it is concluded that:
(1) Section 100A did not apply to 2013 income year.
(2) Part IVA did not apply to enable the Commissioner to make a determination in respect of the 2012 income year.
(3) Part IVA did apply to enable the Commissioner to make a determination in respect of the 2013 income year.
[Tax Month – January 2023; next month – 15.4.23]