Linter Textiles Australia Ltd (in liquidation) v Commissioner of Taxation [2002] FCA 1089

FEDERAL COURT OF AUSTRALIA Linter Textiles Australia Ltd (in liquidation) v Commissioner of Taxation [2002] FCA 1089

INCOME TAX – recovery of tax – Notice of Assessment issued to taxpayer – taxpayer in liquidation – notice of objection lodged by taxpayer – objection disallowed – whether losses of previous years were to be taken into account in assessing tax payable – whether there was substantial continuity of beneficial ownership of shares for the purposes of s 80A Income Tax Assessment Act 1936 (Cth) – whether winding up order affected beneficial ownership of shares – meaning of "beneficial ownership" CORPORATIONS LAW – insolvency – effect of winding up on beneficial ownership of company's assets – whether making of a winding up order in relation to parent company has the result that parent company ceases to be the beneficial owner of its assets including the shares it holds in subsidiary company – whether making of winding up order in relation to subsidiary company has the result that parent company's status as a member of subsidiary becomes that of a contributory – whether making of winding up order in relation to subsidiary meant that parent company's shares ceased to carry rights referred to in s 80A(1) Income Tax Assessment Act 1936 (Cth) WORDS & PHRASES– "beneficial ownership"

Income Tax Assessment Act 1936 (Cth) s 79E, 80A(1)(c), (d), (e), 80A(2), 80A(3), 80E(1)(c), 80G(6), 80G(6)(e), 80(4), 80(5), 80(6), 103A(4) Corporations Law 1992 (Cth) s 474(2), 477(1), 477(2)(c) Bankruptcy Act 1966 (Cth) Income Tax Act 1922-1934 (Cth) s 31A Finance Act 1954 (UK)

Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592 applied In re Farrow's Bank Ltd [1921] 2 Ch 164 applied In re Lines Bros Ltd [1983] 1 Ch 1 referred to Federal Commissioner of Taxation v Macquarie Health Corporation Ltd (1999) 17 ACLC 171 applied Dalgety Downs Pastoral Co Pty Ltd v Federal Commissioner of Taxation (1952) 86 CLR 335 considered Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 considered Federal Commissioner of Taxation v Students World (Aust) Pty Ltd (1977-1978) 138 CLR 251 considered Federal Commissioner of Taxation v Casuarina Pty Ltd (1970-1971) 127 CLR 62 considered In re Oriental Inland Steam Co; ex parte Scinde Railway Co [1873-1874] LR 9 Ch App 557 considered Inland Revenue Commissioners v Olive Mill Ltd [1963] 1 WLR 712 considered Franklin's Selfserve Pty Ltd v Federal Commissioner of Taxation (1970) 125 CLR 52 followed, applied Wood Preservation Ltd v Prior [1969] 1 WLR 1077 considered Federal Commissioner of Taxation v Brian Hatch Timber Co (Sales) Pty Ltd (1971-1972) 128 CLR 28 considered Ayerst (Inspector of Taxes) v C & K (Construction) Ltd [1976] AC 167 not followed J Sainsbury PLC v O'Connor (Inspector of Taxes) [1991] 1 WLR 963 considered Federal Commissioner of Taxation v St Hubert's Island Pty Ltd (1977-1978) 138 CLR 210 considered Deputy Commissioner of Taxation v AGC (Advances) Ltd (1984) 1 NSWLR 29 considered Re Allan Fitzgerald Pty Ltd (1992-1993) 9 ACSR 627 considered Federal Commissioner of Taxation v Macquarie Health Corporation Ltd (1998) 98 ATC 5214 followed Mineral & Chemical Traders Pty Ltd v T Tymczyszyn Pty Ltd (1994) 15 ACSR 398 considered CPH Property Pty Ltd v Federal Commissioner of Taxation (1998) 88 FCR 21 considered DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510 referred to Re Transphere Pty Ltd (1986) 5 NSWLR 309 referred to Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694 referred to White v Bristol Aeroplane Co Ltd [1953] 1 Ch 65