Macquarie Bank Limited v Commissioner of Taxation [2011] FCA 1076

FEDERAL COURT OF AUSTRALIA

Macquarie Bank Limited v Commissioner of Taxation [2011] FCA 1076 Citation: Macquarie Bank Limited v Commissioner of Taxation [2011] FCA 1076

Parties: MACQUARIE BANK LIMITED (ACN 008 583 542) v COMMISSIONER OF TAXATION MONGOOSE PTY LIMITED (ACN 103 410 297) v COMMISSIONER OF TAXATION

File numbers: NSD 105 of 2010 NSD 106 of 2010

Judge: EDMONDS J

Date of judgment: 26 September 2011

Catchwords: INCOME TAX – company becoming subsidiary member of consolidated group owning assets with cost base below their value at date of joining – subsequent sale of assets Part 3-90 of Income Tax Assessment Act 1997 (Cth) (Consolidated Groups) – s 701-1: single entity rule – ss 701-10 and 705-10: cost to head company of assets of joining entity and tax cost setting rules of joining entity Part IVA of Income Tax Assessment Act 1936 (Cth) (Schemes to Reduce Income Tax) – whether provisions can apply to deny operation of joining rules for consolidated groups HELD: Part IVA could not be relied upon by Commissioner to deny application of such rules on the facts of this case

Legislation: Income Tax Assessment Act 1936 (Cth) Pt IVA Income Tax Assessment Act 1997 (Cth) Pt 3-90 Explanatory Memorandum to New Business Tax System (Consolidation) Bill (No. 1) 2002

Cases cited: Commissioner of Taxation v Consolidated Press Holdings Limited (2001) 207 CLR 235 cited, applied Commissioner of Taxation v News Australia Holdings Pty Ltd (2010) 79 ATR 461 cited Commissioner of Taxation v Sleight (2004) 136 FCR 211 cited Futuris Corporation Ltd v Commissioner of Taxation (2007) 159 FCR 257 cited McCutcheon v Commissioner of Taxation (2008) 168 FCR 149 distinguished RCI Pty Limited v Commissioner of Taxation [2011] FCAFC 104 cited Pagone GT, Tax Avoidance in Australia (The Federation Press, 2010)