ConnectEast Management Ltd v Commissioner of Taxation [2008] FCA 557

FEDERAL COURT OF AUSTRALIA

ConnectEast Management Ltd v Commissioner of Taxation [2008] FCA 557

INCOME TAX – classification of trust for purpose of determining tax liability – where a trust wholly owned by a trust of a higher level deemed to be of the same level as the owner trust – whether trust owned by two trusts of the same higher level could be deemed to be of that level on the basis of collective ownership

WORDS AND PHRASES – "each" Income Tax Assessment Act 1936 (Cth) Sch 2F ss 272-20, 272-127, subdivs 272-G, 272-H, 272-I Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297 cited CONNECTEAST MANAGEMENT LIMITED v COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

VID 1052 of 2007

HEEREY J

29 APRIL 2008

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VID 1052 of 2007

BETWEEN: CONNECTEAST MANAGEMENT LTD AS TRUSTEE FOR THE CONNECTEAST INVESTMENT TRUST 2

Applicant

AND: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

JUDGE: HEEREY J

DATE OF ORDER: 29 APRIL 2008

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT:

1. The appeal is dismissed with costs, including reserved costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VID 1052 of 2007

BETWEEN: CONNECTEAST MANAGEMENT LTD AS TRUSTEE FOR THE CONNECTEAST INVESTMENT TRUST 2

Applicant

AND: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

JUDGE: HEEREY J

DATE: 29 APRIL 2008

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicant is the trustee of a unit trust called the ConnectEast Investment Trust No.2 (the Subsidiary Trust). Units in the Subsidiary Trust are held by other trusts (of which the applicant is also trustee) as follows: ConnectEast Holding Trust (the Holding Trust) 1 ConnectEast Investment Trust (the Investment Trust) 477,963,546