Commissioner of Taxation v Consolidated Press Holdings Pty Ltd [1999] FCA 1199

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Consolidated Press Holdings Ltd [ 1999] FCA 1199

TAXATION AND REVENUE – income tax – tax avoidance – outgoings incurred in relation to foreign source income – application of quarantining provisions of s 79D – application where zero foreign source income – transactions to avoid application of s 79D in connection with financing of proposed takeover – whether a scheme under Part IVA – provision held to apply to case of zero foreign source income – scheme for purpose of tax benefit – Part IVA applicable.

Dividend stripping scheme – corporate reorganisation – relocation of holding structure from United Kingdom to Bahamas – commercial purpose unrelated to tax benefit from dividend stripping – no dominant purpose of tax avoidance – s 177E and Part IVA inapplicable.

Income Tax Assessment Act 1936 (Cth), ss 46, 46A, 46B, 47(1), 51, 79D, 102L(3), 102T(3), 160AFD, 160APHA, 160APP, 160AQT, 160ARDCA, 177A, 177C, 177D, 177E, 177F, 260 Income Tax Laws Amendment Act (No 2) 1981 (Cth) Income Tax Assessment Act (No 3) 1972 (Cth)

Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404, followed AGC (Advances) Ltd v Federal Commissioner of Taxation (1975) 132 CLR 175, cited Esquire Nominees Ltd v Federal Commissioner of Taxation (1973) 129 CLR 177, distinguished Thiel v Federal Commissioner of Taxation (1990) 171 CLR 338, referred to Federal Commissioner of Taxation v Peabody (1994) 181 CLR 359, cited Inland Revenue Commissioners v Brebner [1967] 2 AC 18, cited Peabody v Federal Commissioner of Taxation (1993) 40 FCR 531, cited CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, cited Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297, cited Saraswati v The Queen (1991) 172 CLR 1, cited Investment and Merchant Finance Corporation Limited v Federal Commissioner of Taxation (1970) 120 CLR 177, discussed Investment and Merchant Finance Corporation Limited v Federal Commissioner of Taxation (1971) 125 CLR 249, cited Federal Commissioner of Taxation v Patcorp Investments Ltd (1976) 140 CLR 247, discussed Bell v Federal Commissioner of Taxation (1953) 87 CLR 548, cited Newton v Federal Commissioner of Taxation (1958) 98 CLR 1, cited Hancock v Federal Commissioner of Taxation (1961) 108 CLR 258, cited Federal Commissioner of Taxation v Ellers Motor Sales Pty Ltd (1972) 128 CLR 602, cited Rowdell Pty Ltd v Commissioner of Taxation (1963) 111 CLR 106, cited John v Federal Commissioner of Taxation (1989) 166 CLR 417, cited Slutzkin v Federal Commissioner of Taxation (1977) 140 CLR 314, cited Harrison v Federal Commissioner of Taxation (1977) 77 ATC 4144, cited Hennessey v Federal Commissioner of Taxation (1975) 10 SASR 353, cited Federal Commissioner of Taxation v Newton (1957) 96 CLR 577, cited K Porter & Co Pty Ltd v Federal Commissioner of Taxation (1977) 19 ALR 510, cited Federal Commissioner of Taxation v Students World (Australia) Pty Ltd (1978) 138 CLR 251, cited Woellner, Vella, Burns, Barkoczy and Krever, Australian Taxation Law (9th ed 1999) Vincent, "Dividend Stripping: stricto sensu or strictly senseless" (1989) 24 Taxation in Australia 82