Commissioner of Taxation v Clark [2011] FCAFC 5

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Clark [2011] FCAFC 5 Citation: Commissioner of Taxation v Clark [2011] FCAFC 5

Appeal from: Clark v Commissioner of Taxation [2009] FCA 1401

Parties: COMMISSIONER OF TAXATION v DAVID CLARK COMMISSIONER OF TAXATION v HELEN CLARK

File numbers: QUD 1 of 2010 QUD 2 of 2010

Judges: DOWSETT, EDMONDS AND GORDON JJ

Date of judgment: 21 January 2011

Catchwords: INCOME TAX – whether trustee of trust estate had incurred capital losses in an earlier year of income – whether onus of proof had been discharged – no error in primary judge's reliance on secondary evidence in respect of a transaction occurring over twenty years ago where primary evidence no longer existed; where the primary judge had accepted the evidence led by the trustee and in the absence of any positive case put by the Commissioner. Held: losses incurred. INCOME TAX – Div 6 of Pt III of the Income Tax Assessment Act 1936 (Cth) – continuity of trust estate – whether trust estate as originally constituted had ceased so that capital losses were not available to offset capital gains subsequently derived – indicia of continuity – whether satisfied in the present case. Held: no discontinuity to prevent capital losses offsetting capital gain.

Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 44 Income Tax Assessment Act 1922-1928 (Cth) s 31 Income Tax Assessment Act 1936 (Cth) ss 6, 95, 97, Pt IX Income Tax Assessment Act 1997 (Cth) ss 6-5, 6-10, 102-5 Corporations Act 2001 (Cth) s 1305 Superannuation Industry (Supervision) Act 1993 (Cth) s 10 Taxation Administration Act 1953 (Cth) s 14ZZO