Clough Limited v Commissioner of Taxation [2021] FCA 108

Federal Court of Australia

Clough Limited v Commissioner of Taxation [2021] FCA 108 File number: WAD 69 of 2020

Judgment of: COLVIN J

Date of judgment: 18 February 2021

Catchwords: TAXATION - appeal against objection decision of Commissioner of Taxation - whether amount paid in consideration for cancellation of employee entitlements deductible under s 8-1 of Income Tax Assessment Act 1997 (Cth) - where share options and performance rights of employees required to be converted or cancelled upon change in control of business - whether amount paid in gaining or producing assessable income - whether amount necessarily incurred in carrying on business for purpose of gaining or producing assessable income - appeal dismissed

Legislation: Income Tax Assessment Act 1997 (Cth) ss 8-1, 701-1, 40-880

Cases cited: Amalgamated Zinc (De Bavay's) Ltd v Federal Commissioner of Taxation (1935) 54 CLR 295 Commissioner of Taxation (Cth) v Smith (1981) 147 CLR 578 Commissioner of Taxation v Day [2008] HCA 53; (2008) 236 CLR 163 Commissioner of Taxation v Healius Ltd [2020] FCAFC 173 Commissioner of Taxation v Payne [2001] HCA 3; (2001) 202 CLR 93 Esso Australia Resources Ltd v Commissioner of Taxation (Cth) (1998) 84 FCR 541 Fletcher v Federal Commissioner of Taxation (1991) 173 CLR 1 GP International Pipecoaters Pty Ltd v Federal Commissioner of Taxation (1990) 170 CLR 124 Hallstroms Pty Ltd v Federal Commissioner of Taxation (1946) 72 CLR 634 Herald & Weekly Times Ltd v Federal Commissioner of Taxation (Cth) (1932) 48 CLR 113 John Fairfax & Sons Pty Ltd v Federal Commissioner of Taxation (1959) 101 CLR 30 Lunney & Hayley v Federal Commissioner of Taxation (1958) 100 CLR 478 Macquarie Finance Limited v Commissioner of Taxation [2005] FCAFC 205; (2005) 146 FCR 77 Magna Alloys & Research Pty Ltd v Federal Commissioner of Taxation (1980) 49 FLR 213 Ronpibon Tin NL & Tong Kah Compound NL v Federal Commissioner of Taxation (1949) 78 CLR 47 Spriggs v Commissioner of Taxation [2009] HCA 22; (2009) 239 CLR 1 Trustees of the Estate Mortgage Fighting Fund Trust v Commissioner of Taxation [2000] FCA 981; (2000) 102 FCR 15 Watson as trustee for the Murrindindi Bushfire Class Action Settlement Fund v Commissioner of Taxation [2020] FCAFC 92