Dolby v Commissioner of Taxation [2002] FCA 1065

FEDERAL COURT OF AUSTRALIA

Dolby v Commissioner of Taxation [2002] FCA 1065 TAXATION – appeal against objection decision disallowing an objection to Notice of Private Ruling – application of capital gains tax law to applicant in calculating cost base of 100 shares in Telstra purchased pursuant to the first Telstra public share offer – in which quarter was liability for the final instalment "incurred" for the purchase of shares – relevant indexation factor for determining indexed cost base of the applicant's shares – when taxpayer makes a capital gain – whether applicant was required to pay final instalment at time Telstra accepted applicant's application for shares or in quarter in which final instalment was paid – whether applicant came under personal obligation to pay final instalment prior to December quarter of 1998 – purchase by instalments involves incurring expenditure of money at time instalment contract entered into – liability to pay amount of final instalment arose upon formation of sale of shares contract and allocation of shares in November 1997 – liability of applicant to pay final instalment of purchase price for shares was personal liability arising at time of registration of applicant as Instalment Receipt Holder for specific shares – liability to pay was defeasible on disposal of Instalment Receipts – an instalment contract with a prohibition on pre-payment of instalments payable on nominated dates does not cease to be an instalment contract for that reason WORDS & PHRASES – "incur", "incurred", "instalment contract" Income Tax Assessment Act 1997 (Cth), Parts 3-1 and 3-3, Subdivision 960-M, ss 8-1, 102-20, 103-15, 103-25, 104-10, 109-5, 110-25, 112-35, 114-1, 114-15, 960-270, 960-275(2) Taxation Administration Act 1953 (Cth), ss 14ZAQ, 14ZAS, 14ZAZA, 14ZZ Income Tax Assessment Act 1936 (Cth) (repealed), Part IIIA, s 51(1) United Energy Limited v Commissioner of Taxation (1997) 78 FCR 169, cited First Provincial Building Society Ltd v Commissioner of Taxation (1995) 56 FCR 320, cited Payne v Federal Commissioner of Taxation (1994) 28 ATR 58, cited CTC Resources NL v Commissioner of Taxation (1994) 48 FCR 397, cited Merrill Lynch International (Australia) Ltd v Federal Commissioner of Taxation (2001) 47 ATR 611, cited Commissioner of Taxation v Mercantile Mutual Insurance (Workers' Compensation) Ltd (1999) 87 FCR 536, cited Ogilvy & Mather Pty Ltd v Federal Commissioner of Taxation (1990) 90 ATC 4836, cited Commonwealth Aluminium Corporation Ltd v Federal Commissioner of Taxation (1977) 32 FLR 210, cited New Zealand Flax Investments Pty Ltd v Federal Commissioner of Taxation (1938) 61 CLR 179, cited Australian and New Zealand Banking Group Ltd v Federal Commissioner of Taxation (1994) 48 FCR 268, cited Coles Myer Finance Ltd v Federal Commissioner of Taxation (1993) 176 CLR 640, cited Federal Commissioner of Taxation v James Flood Pty Ltd (1953) 88 CLR 492, cited Federal Commissioner of Taxation v Australian Guarantee Corporation Ltd (1984) 2 FCR 483, cited