W.D. & H.O. Wills (Australia) Pty Ltd v Commissioner of Taxation [1996] FCA 108

CATCHWORDS INCOME TAX - Income Tax Assessment Act 1936, s 51(1) - allowable deductions - premiums paid to an off-shore "captive insurer" for health risks coverage not available on open market - whether necessarily incurred in carrying on business as a manufacturer and distributor of tobacco. Whether premiums paid to captive insurer constituted outgoings of a capital nature - whether premiums amounted to creation of a capital fund. INCOME TAX - Income Tax Assessment Act 1936, Part IVA - whether scheme for payment of premiums to a captive insurer was entered into or carried out for the dominant purpose of obtaining a tax benefit - whether tax benefit obtained from scheme. Income Tax Assessment Act, 1936 (Cth) Taxation Administration Act, 1953 (Cth) AGC (Advances) Ltd v Phillips (1978) 20 ALR 607 Australian Health Insurance Association Ltd v Esso Australia Ltd (1993) 41 FCR 450 Commissioner of Taxation (NSW) v Ash (1938) 61 CLR 263 Federal Commissioner of Taxation v Hallstroms Pty Ltd (1946) 72 CLR 634 Federal Commissioner of Taxation v South Australia Battery Makers Pty Ltd (1978) 140 CLR 645 Federal Commissioner of Taxation v Phillips (1978) 20 ALR 607 Federal Commissioner of Taxation v Smith (1981) 147 CLR 578 Federal Commissioner of Taxation v Adler (1981) 55 FLR 294 Federal Commissioner of Taxation v Spotless Services Ltd (1995) 95 ATC 4775 Fletcher v Federal Commissioner of Taxation (1991) 173 CLR 1 GRE Insurance Ltd v Federal Commissioner of Taxation (1992) 34 FCR 160 John Fairfax & Sons Pty Ltd v Federal Commissioner of Taxation (1959) 101 CLR 30 Magna Alloys and Research Pty Ltd v Federal Commissioner of Taxation (1980) 33 ALR 213 NM Superannuation Pty Ltd v Young (1993) 41 FCR 182 Peabody v Commissioner of Taxation (1993) 40 FCR 531 Prudential Insurance Co v Commissioners of Inland Revenue [1904] 2 KB 658 Ransburg Australia Pty Ltd v Federal Commissioner of Taxation (1980) 47 FLR 177 Ronpibon Tin No Liability v Federal Commissioner of Taxation (1949) 78 CLR 47 Ure v Federal Commissioner of Taxation (1981) 50 FLR 219 W.D. & H.O. WILLS (AUSTRALIA) PTY LTD v COMMISSIONER OF TAXATION NG 262 of 1994 NG 263 of 1994 NG 264 of 1994 NG 265 of 1994 Sackville J. Sydney 1 March 1996