McNeil v Commissioner of Taxation [2004] FCA 420

FEDERAL COURT OF AUSTRALIA

McNeil v Commissioner of Taxation [2004] FCA 420 INCOME TAX – test case involving applicant as individual shareholder in listed public company – announcement of buy back by listed public company of 5% of its issued share capital – sell back rights issued to shareholders – existing holding of shares not revenue asset in applicant's hands – sell back rights listed on ASX for limited period of trading – applicant elected not to include her sell back rights in ASX listing – at conclusion of limited period of trading applicant entitled to share in proceeds of sale of sell back rights according to pre-existing formula – whether share of proceeds of sale of sell back rights income according to ordinary concepts in shareholder's hands CAPITAL GAINS TAX – alternatively whether stock market value of applicant's unrealised sell back rights based on share market price of first day's listing of sell back rights subject to capital gains tax Income Tax Assessment Act 1997 s 6-5, 104-1D, 104-155, 116-20, 118-20 Income Tax Assessment Act 1936 s 25(1) Income Tax Assessment Act 1915-1918 (NSW) s 14 Income Tax (Management) 1928 (NSW) s 11(b) McNeil v Commissioner of Taxation (2003) FCA 958 Abbott v Philbin [1961] AC 352 Donaldson v Federal Commissioner of Taxation (1974) 3 ALR 516 Eisner v Macomber (1920) 252 US 189 Federal Commissioner of Taxation v Montgomery (1999) 198 CLR 639 Scott v Federal Commissioner of Taxation (1935) 35 SR (NSW) 215 Webb v Federal Commissioner of Taxation (1922) 30 CLR 450 Commissioner of Taxation (NSW) v Stephenson (1937) 59 CLR 80 Federal Commissioner of Taxation v Blakely (1951) 82 CLR 388 Gibb v Commissioner of Taxation (1966)118 CLR 628 Federal Commissioner of Taxation v Miranda (1976) 11 ALR 85 Macmine Pty Ltd v Federal Commissioner of Taxation (1979) 24 ALR 217 Hepples v Commissioner of Taxation (1991-1992) 173 CLR 492 Workers' Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642 Australian Securities Commission v Bank Leumi Le-Israel (Switzerland) and Others (1996) 69 FCR 531 Parsons, Income Taxation in Australia (1985) Farrands, The Law of Options (1992) HELEN MARY McNEIL v COMMISSIONER OF TAXATION N 1169 OF 2002 CONTI J 14 APRIL 2004 SYDNEY