Idlecroft Pty Ltd v Commissioner of Taxation [2005] FCAFC 141

FEDERAL COURT OF AUSTRALIA

Idlecroft Pty Ltd v Commissioner of Taxation [2005] FCAFC 141

TAXATION – appeals against disallowance of objections by the Commissioner of Taxation – appellants entered joint venture agreements with Westside Commerce Centre Pty Ltd ("WCC") as trustee of the Hendon Unit Trust to develop a property – agreed method of funding was to add WCC as a beneficiary and appoint income to it – WCC had tax losses and therefore would not pay tax on any appointed income – only 12 per cent of the income appointed was to be paid immediately – appellants reported to the Commissioner that WCC was presently entitled to the appointed income – Commissioner accepted that the appointments of income were valid – Commissioner assessed appellants on the basis that they did not confer a present entitlement on WCC and were liable to pay tax on the appointed income – whether WCC properly appointed as beneficiary – whether appellants liable to tax pursuant to s 99A of the Income Tax Assessment Act 1936 (Cth) in respect of all or any part of the income they purported to appoint to WCC – whether appellants were presently entitled – whether s 100A operates to defeat any such entitlement – whether there was any tax shortfall on which the Commissioner could properly impose additional tax and penalties pursuant to Pt VII Income Tax Assessment Act 1936 (Cth) ss 95A, 96, 97, 99, 99A, 100A, 101, 169 Taxation Administration Act 1953 (Cth) s 14ZZ BRK (Bris) Pty Ltd v Federal Commissioner of Taxation (2001) 46 ATR 347 discussed Cridland v Federal Commissioner of Taxation (1977) 140 CLR 330 referred to Commissioner of Taxation v Prestige Motors Pty Ltd (1998) 82 FCR 195 followed Commissioner of Taxation v Consolidated Press Holdings Ltd (1999) 91 FCR 524 referred to East Finchley v Federal Commissioner of Taxation (1989) 90 ALR 457 distinguished