J & G Knowles v Commissioner of Taxation [2000] FCA 196

FEDERAL COURT OF AUSTRALIA

J & G Knowles v Commissioner of Taxation [2000] FCA 196 TAXATION – Fringe Benefits tax – whether fringe benefits tax is payable in respect of interest free loans to directors of a trustee company who are beneficiaries of the trust – whether there is a sufficient or material connection between the loans and the employment of the directors

WORDS AND PHRASES – "in respect of" Fringe Benefits Tax Assessment Act 1986 (Cth) ss 16(1), 18, 66(1), 136(1) and 148 Smith v Federal Commissioner of Taxation (1987) 164 CLR 513 – considered State Government Insurance Office v Rees (1979) 144 CLR 549 - cited Technical Products Pty Ltd v State Government Insurance Office (Queensland) (1988) 167 CLR 45 – cited Long Service Leave Board v Irving (1997) 74 FCR 587 – cited Commissioner of Taxation v Scully [2000] HCA 6 - cited Environment Agency v Empress Car Co Ltd [1999] 2 AC 22 – cited The National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 – cited Commissioner of Taxation v Rowe (1995) 60 FCR 99 – considered J & G KNOWLES & ASSOCIATES PTY LTD v COMMISISONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA V 485 of 1999 JUDGES: HEEREY, MERKEL AND FINKELSTEIN JJ PLACE: MELBOURNE DATE: 3 MARCH 2000

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 485 OF 1999

BETWEEN: J & G KNOWLES & ASSOCIATES PTY LTD

(ACN 005 219 572)]

APPELLANT

AND: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

RESPONDENT JUDGE: HEEREY, MERKEL AND FINKELSTEIN JJ

DATE OF ORDER: 3 MARCH 2000

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The orders made by the trial judge on 4 August 1999 be set aside and in lieu thereof it be ordered that: (a) the decision of the Administrative Appeals Tribunal made on 21 May 1998 be set aside; (b) the matter be remitted to the Administrative Appeals Tribunal to be determined in accordance with law. 3. The respondent pay the appellant's taxed costs of the appeal and the hearing below.