The High Court has released transcripts of its hearings of the taxpayers’ appeal, heard in Canberra, against the decision of the Full Federal Court in Bywater Investments Ltd & Ors v FCT [2015] FCAFC 176 was heard by the High Court on 24 August 2016 (HCATrans 183) and 25 August 2016 (HCATrans 184).

The Full Federal Court had dismissed the taxpayers’ appeals from 2 Federal Court decisions that had held the taxpayers were residents of Australia for tax purposes and were liable to pay income tax in Australia on profits made from the sale of shares. This, in turn, was an appeal from two cases: Hua Wang Bank Berhad v Commissioner of Taxation  [2014] FCA 1392 Hua Wang Bank Berhad v Commissioner of Taxation (No 19) [2015] FCA 454 . These were Vanda Gould cases.

The catchwords from this FFC appeal are as follows:

INCOME TAX – whether companies residents of Australia – place of central management and control – relevant principles

INCOME TAX – profits from sale of shares – whether on revenue or capital account – where shares agreed to be trading stock

INCOME TAX – trading stock – construction of s70-40(2) of the Income Tax Assessment Act 1997 (Cth) – whether items taken into account for purposes of Division 70 – relevant principles

INCOME TAX – shares – whether proved to be held beneficially