Oakey Abbatoir Pty Ltd v Commissioner of Taxation [1984] FCA 316

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CATCHWORDS

Income tax - Distribution by prepayment of interest on convertible notes to avoid additional tax under Div.7 of Pt. III - "sham" - "anterest" under s.82R(6) - "fiscal

nullity" under Ramsay doctrine [1982] A.c. 300 - s.260

Oakey Abattoir Pty. Ltd. v. The Commissioner of Taxation

No. G84 of 1984

Fox, Fisher and Beaumont, JJ. 5 October 1984. Sydney.

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IN THE FEDERAL COURT OF AUS'TRALLA

)

) QUEENSLAND DISTRICT REGISTRY ) .

)

)

GENERAL DIVISTON

BETWEEN :

AND BETWEEN :

No. G&d of 1984

ON APPEAL from the Supreme Court of Queensland

OAKEY ABATTOIR PTY. LID. Appellant

THE COMMISSIONER OF TAXATION Respondent

THE COMMISSIONER OF TAXATION

Judges making cocder: Date order made:

Where made: s

THE COURT ORDERS THAT:

1. The appeal be

Cross-appellant

QAKEY ABATTOIR PTY. LTD. Cross-respondent

ORDER

Fox, Fisher and Beaumont. JJ.

5 October 1984,

vdney.

dismissed.

2. The

appeal. 3. The 4, The

costs of the

appellant pay

tJ

the respondent's costs of the

cross-appeal be dismissed.

cross-appellant

cross-appeal.

pay

the

cross-respondent's

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISTON No. G84 of 1984

ON APPEAL from the Supreme Court cf Queensland

BETWEEN : OAKEY ABATTOIR PTY. LTD. Appellant

AND: THE COMMISSIONER OF TAXATION Respondent

AND BETWEEN : THE COMMISSIONER OF TAXATION

Cross-appellant

AND: OAKEY ABATTOIR PTY. LTD. Cross-respondent

CORAM: Fox. Fisher and Beaumont. JJ.

DATED: 5 October 1984.

REASONS FOR JUDGMENT

THE COURT: This is an appeal against a judament of a Sinale judge of the Supreme Court of Queensland dismissing an appeal by the appellant ("the taxpayer") against an assessment of additional tax under Davision 7 of Part III of

the Income Tax Assessment Act, 1336 ("the Act") in respect

tu

of income derived by the taxpayer during the year of income

ended 30 June 1980.

The taxpayer was assessed to additional tax in the sum of $266,691.00 on the basis that 1t was not, by virtue of 3.105 of the Act. deemed tc have made a sufficient distribution in relation to that year of income and, therefore. was liable to pay additional tax upon the undistributed amount of $533,382.00. The taxpayer objected to the assessment on the around that 1t did not have an undistributed amount in respect of the year of income. It conceded that the amount of sufficient distribution was $533,382.00 but claimed that. on 22 December 1980. it had paid an amount of $534,524.00 by way of interest on a convertible note issue. so that. in accordance with s.82R(6) of the Act, the interest. peing interest paid on a convertible note issue, was to be treated as a dividend tor