Commissioner of Taxation v Ilbery, Jonathan Richard [1981] FCA 215

_ (1981) 2 W.L.R. 449 (H.L.).

CATCHWORDS

Income tax (Commonwealth) - deductions - outgoings incurred

in gaining assessable income ~ arrangement by taxpayer to borrow money for avowed intention of reducing liability for tax - arrangement involving prepayment of interest - whether prepayment constitutes allowable deduction - applicability

of s.260 Income Tax Assessment Act 1936 - applicability of principles in W. T. Ramsey Ltd. v. Inland Revenue Commissioners

Income Tax Assessment Act 1936 ss.51(1), 260

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v. JONATHAN RICHARD ILBERY

W.A. No. G.21 of 1981 Northrop, Toohey and Sheppard JJ. 25 November 1981

Perth

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

W.A. No. G.21 of 1981

wwe we

ON APPEAL FROM THE SUPREME COURT OF WESTERN AUSTRALIA

BETWEEN: THE COMMISSIONER OF TAXATION OF Appellant THE COMMONWEALTH OF AUSTRALIA and JONATHAN RICHARD ILBERY Respondent ORDER JUDGES: Northrop, Toohey and Sheppard JJ, DATE: . 25 November 1981 PLACE: Perth

THE COURT ORDERS THAT:

1.

Appeal allowed.

The order of the Supreme Court of Western Australia be set aside

and in lieu thereof order that the assessment be confirmed.

The respondent pay the appellant's costs of the appeal and of the proceedings in the Supreme Court. Liberty to the respondent to apply within 21 days to vary the teres of

paragraph 3. Liberty te respondent to apply under the Suitors Fund Act 1964 of Western Australia.

IN THE FEDERAL COURT OF AUSTRALIA

) ) WESTERN AUSTRALIA DISTRICT REGISTRY ) W.A. No, G.21 of 1981 ) )

GENERAL DIVISION

ON APPEAL FROM THE SUPREME COURT OF WESTERN AUSTRALIA

'

BETWEEN:

THE COMMISSIONER OF TAXATION OF

THE COMMONWEALTH OF AUSTRALIA Appellant and JONATHAN RICHARD ILBERY Respondent "NORTHROP and SHEPPARD J. REASONS FOR JUDGMENT 25 NOVEMBER 1981