Futuris Corporation Limited v Commissioner of Taxation [2010] FCA 935

FEDERAL COURT OF AUSTRALIA

Futuris Corporation Limited v Commissioner of Taxation [2010] FCA 935

Citation: Futuris Corporation Limited v Commissioner of Taxation [2010] FCA 935

Parties: FUTURIS CORPORATION LIMITED ACN 004 336 636 v COMMISSIONER OF TAXATION

File numbers: SAD 110 of 2005; WAD 153 of 2003

Judge: BESANKO J

Date of judgment: 31 August 2010

Catchwords: TAXATION — appeal under s 14ZZ of the Taxation Administration Act 1953 (Cth) against appealable objection decision by Commissioner in relation to amended assessment — capital gains realised on sale by holding company of shares in wholly owned subsidiary — transactions prior to sale involving holding company and subsidiaries which engaged Part IIIA Division 19A of the Income Tax Assessment Act 1936 (Cth) so as to transfer cost base from taxpayer's investment in one subsidiary to taxpayer's investment in company to be sold — Commissioner decides that transactions result in a reduction in capital gains realised on sale and the obtaining of a tax benefit — whether applicant obtained a tax benefit in connection with a scheme under ss 177C(1) and 177D(a) of the Income Tax Assessment Act 1936 (Cth) — whether persons who entered into the scheme did so for purpose of obtaining a tax benefit in connection with the scheme under s 177D(b) of the Income Tax Assessment Act 1936 (Cth)

HELD: Applicant did not obtain tax benefit in connection with a scheme within ss 177C(1) and 177D(a) because if scheme had not been entered into or carried out applicant would, as a matter of reasonable expectation, have carried out sale in accordance with transactions where alleged tax benefit would not have been included in its assessable income. Commissioner's assessment was therefore excessive.