Spotlight Stores Pty Ltd v Commissioner of Taxation [2004] FCA 650

FEDERAL COURT OF AUSTRALIA

Spotlight Stores Pty Ltd v Commissioner of Taxation [2004] FCA 650

INCOME TAX – prepayment into a trust fund by an employer of future annual bonuses expected to become payable to its employees – whether the prepayment is an outgoing of capital or of a capital nature – whether the dominant purpose of the employer's scheme in respect of its employees' future bonuses was the obtaining of a tax benefit in connection with the scheme – whether the Commissioner was entitled to cancel the tax benefit FRINGE BENEFITS TAX - whether the prepayment was a fringe benefit when it was not provided in respect of any particular employee EQUITY - whether a trust has been validly established when the members of the class of potential beneficiaries are not beneficiaries of the trust when it is established

Income Tax Assessment Act 1936 (Cth) ss 51(1), 266 and 266L and Pt IVA Fringe Benefits Tax Assessment Act 1986 (Cth) s 136(1)

Essenbourne Pty Limited v Federal Commissioner of Taxation (2002) 51 ATR 629 – considered Walstern v Commissioner of Taxation (2003) 54 ATR 423 – distinguished In re Hay's Settlement Trusts (Greig v McGregor) [1982] 1 WLR 202 – cited In re Baden's Deed Trusts (McPhail v Doulton) [1971] AC 424 - cited Kinsela v Caldwell (1975) 132 CLR 458 – applied Re Bowles [1902] 2 Ch 650 – cited Re Leeds and Havley Theatres of Variets Ltd [1902] 2 Ch 809 - cited United Energy Ltd v Commissioner of Taxation (1997) 78 FCR 169 - applied W. Nevill and Company Limited v The Federal Commissioner of Taxation (1937) 56 CLR 290 – considered Sun Newspapers Limited v The Federal Commissioner of Taxation (1938) 61 CLR 337 – applied Hancock (Surveyor of Taxes) v General Reversionary and Investment Company Limited [1919] 1 KB 25 – applied British Insulated and Helsby Cables, Limited v Atherton [1926] AC 205 - distinguished B.P. Australia Limited v Commissioner of Taxation of the Commonwealth of Australia (1965) 112 CLR 386 - cited Tucker (Inspector of Taxes) v Granada Motorway Services Ltd [1979] 1 WLR 683 - cited Anglo-Persian Oil Company, Limited v Dale [1932] 1 KB 124 - cited Heather v P-E Consulting Group Ltd. [1973] Ch 189 - cited Jeffs (Inspector of Taxes) v Ringtons Ltd [1986] 1 All ER 144 - cited Ransburg Australia Pty Ltd v Federal Commissioner of Taxation (1980) 29 ALR 433 - distinguished Commissioner of Taxation of the Commonwealth of Australia v Spotless Services Limited (1996) 186 CLR 404 - applied The Commissioner of Taxation v Peabody (1994) 181 CLR 359 - cited Hart v Commissioner of Taxation (2002) 121 FCR 206 - cited Commissioner of Taxation v Sleight [2004] FCAFC 94 – considered Commissioner of Taxation v Mochkin (2003) 127 FCR 185 at 199-200 - considered SPOTLIGHT STORES PTY LTD v COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA V 795 OF 2002 PRIDECRAFT PTY LTD v COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA V 796 OF 2002 MERKEL J 25 MAY 2004 MELBOURNE