Lewski v Commissioner of Taxation [2017] FCAFC 145

FEDERAL COURT OF AUSTRALIA

Lewski v Commissioner of Taxation [2017] FCAFC 145 File number: VID 1496 of 2016

Judges: PERRAM, PAGONE AND MOSHINSKY JJ

Date of judgment: 18 September 2017

Catchwords: TAXATION – income tax – deductions – when loss or outgoing is "incurred" – contracts for sale and purchase of land and for sale and purchase of aged care hostel business – whether certain amounts were incurred by purchaser upon execution of contracts – whether Tribunal erred in concluding that the amounts were not incurred upon execution of contracts TAXATION – income tax – taxation of trusts – discretionary trust – where trustee resolved to distribute income to particular beneficiary but also resolved to distribute the income to a different beneficiary if the Commissioner disallowed a deduction or included an additional amount in assessable income – whether resolutions were valid – whether variation resolution, if invalid, was severable – whether first-mentioned beneficiary was "presently entitled" to a share of the income of the trust estate TAXATION – review proceedings under Pt IVC of Taxation Administration Act 1953 (Cth) – application by taxpayer to rely on grounds not in objection – principles applicable TRUSTS AND TRUSTEES – discretionary trust – distribution of income – where beneficiary executed deed of disclaimer – whether disclaimer effective – whether beneficiary had already accepted the distribution – whether knowledge of beneficiary's agent should be imputed to beneficiary TRUSTS AND TRUSTEES – discretionary trust – resolution of trustee to distribute income – where resolution expressed in terms of "income" of the trust – where distribution power in trust deed expressed in terms of "Net Income" – whether on its true construction the resolution related to Net Income of the trust