Howard v Commissioner of Taxation [2012] FCAFC 149

FEDERAL COURT OF AUSTRALIA

Howard v Commissioner of Taxation [2012] FCAFC 149 Citation: Howard v Commissioner of Taxation [2012] FCAFC 149

Appeal from: Howard v Commissioner of Taxation (No 2) [2011] FCA 1421

Parties: STEPHEN JAMES HOWARD v COMMISSIONER OF TAXATION COMMISSIONER OF TAXATION v STEPHEN JAMES HOWARD COMMISSIONER OF TAXATION v STEPHEN JAMES HOWARD

File numbers: VID 76 of 2012 VID 77 of 2012 VID 78 of 2012

Judges: MIDDLETON, PERRAM AND DODDS-STREETON JJ

Date of judgment: 26 October 2012

Catchwords: TAXATION – Income tax – Taxpayer awarded equitable damages as compensation for losses sustained in joint venture where joint venturers acted in breach of fiduciary duties – Taxpayer a director of company proposed by him and some other joint venturers to take benefit of business opportunity – Joint venture failed and opportunity lost as result of breach of fiduciary duties – Whether taxpayer held award of damages on trust for company – Given that award had character of income, whether included in assessable income of taxpayer. TAXATION – Income tax – Distributions by non-resident trust estate – Whether included in assessable income of resident discretionary beneficiary – Net income of trust estate – Whether included proceeds of shares sold back to company – Taxpayer beneficiary's share of net income of trust estate. TAXATION – Income tax – Administrative penalty – Whether taxpayer's conduct intentional, reckless or involved failure to take reasonable care.