The ATO on Tue 12.3.2013, released a Decision Impact Statement giving its views on the decision of Middleton J of the Federal Court in [2012] FCA 1195. The Federal Court held that various companies that were part of the Visy group were entitled to a deduction under s 8-1 of the ITAA 1997 for losses of some $75m realised on the sale of a range of businesses on the basis of finding that the businesses had been originally acquired for the purpose of resale at a profit.

Based on the evidence before the Federal Court, and the facts as found, the ATO said it accepts that it was open to the Court to find that the losses incurred by the companies on the disposal of the shares in the subsidiaries were incurred as part of a scheme to divest some of the acquired Southcorp businesses for a profit.

[LTN 48, 12/3/13]