The Deputy Commissioner of Taxation v Coulson, S.C. [1995] FCA 108

CATCHWORDS TAXATION - employee share schemes - trustee of scheme instructed by employee to apply for shares - shares registered in name of trustee and transferred to employee after scheme conditions met - whether shares issued to employee for purpose of Income Tax Assessment Act 1936 sub-s 26AAC(15A). Administrative Appeals Tribunal Act 1975 s 44 Income Tax Assessment Act 1936 s 26AAC; sub-ss 26AAC(5), 26AAC(15), 26AAC(15A), 26AAC(15B) Central Piggery Co. Ltd. v. McNicoll and Central Piggery Co. Ltd. v. Hurst (1949) 78 C.L.R. 594 Commissioner of Inland Revenue v. Barclay's Bank PLC (1994) 13 A.C.S.R. 829 (House of Lords) Commonwealth Homes and Investment Company Limited v. Smith (1937) 59 C.L.R. 443 DEPUTY COMMISSIONER OF TAXATION V. STANLEY CHARLES COULSON NO. WAG91 OF 1994 LEE J. PERTH 10 MARCH 1995

IN THE FEDERAL COURT) OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) GENERAL DIVISION ) NO. WAG91 OF 1994 ON APPEAL FROM A DECISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL B E T W E E N: DEPUTY COMMISSIONER OF TAXATION Applicant and STANLEY CHARLES COULSON Respondent MINUTE OF ORDER JUDGE MAKING ORDER: LEE J. DATE OF ORDER: 10 MARCH 1995 WHERE MADE: PERTH THE COURT ORDERS THAT:

1. The decision of the Tribunal be set aside. 2. The Commissioner pay the respondent's costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT) OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) GENERAL DIVISION ) NO. WAG91 OF 1994 ON APPEAL FROM A DECISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL B E T W E E N: DEPUTY COMMISSIONER OF TAXATION Applicant and STANLEY CHARLES COULSON Respondent CORAM: LEE J. DATE : 10 MARCH 1995 PLACE: PERTH REASONS FOR JUDGMENT This is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal") which set aside a decision of the applicant ("the Commissioner") disallowing the respondent's objection to an assessment of income tax issued to the respondent by the Commissioner for the year of income ended 30 June 1992. The question of law on which the appeal is made, pursuant to s.44 of the Administrative Appeals Tribunal Act 1975, relates to the proper construction of s.26AAC of the Income Tax Assessment Act 1936 ("the Act"). The relevant facts agreed between the parties were as follows. At all material times since 1972 the respondent was employed by Brambles Industries Limited ("Brambles"). In November 1984 Brambles established the "Brambles Employees' Share Scheme" ("the Scheme"). Employees nominated by Brambles were eligible to participate in the Scheme by instructing Brambles Custodians Pty. Ltd. ("the Trustee") to acquire shares in Brambles on behalf of the employee. The obligations of Brambles, and of the Trustee, were set out in a deed executed by those parties. On or before 26 November 1984 the respondent was nominated by Brambles to be an eligible employee for the purpose of the Scheme and the respondent instructed the Trustee to apply for 5,000 shares in Brambles. The "subscription amount" payable for the shares was $10,750. The respondent paid 10 percent of the subscription amount to the Trustee. The Trustee paid 10 percent of the subscription amount to Brambles. The Trustee paid the remainder of the subscription amount by applying the proceeds of an interest-free loan in that amount advanced to the Trustee by Brambles. The 5,000 shares applied for by the Trustee were "allotted" to the Trustee on 26 November 1984 and entered in the Trustee's name on the share register of Brambles at that time. The market value of the 5,000 shares on 26 November 1984 was $17,250.