Kilgour v Commissioner of Taxation [2024] FCA 687

Federal Court of Australia

Kilgour v Commissioner of Taxation [2024] FCA 687 File number: QUD 99 of 2022 QUD 100 of 2022 QUD 101 of 2022 QUD 102 of 2022

Judgment of: LOGAN J

Date of judgment: 26 June 2024

Catchwords: TAXATION – where the applicants appeal from objection decisions made by the respondent Commissioner concerning the inclusion in their taxable income of the capital gain proceeds from the sale of shares in a company, Punters Paradise Pty Ltd (Punters), to News Corp Investments Australia Pty Ltd (News Corp Investments) – where there was no formal relationship, in terms of shareholding, directorships or control, between Punters and News Corp Investments or any other News Corp related entities (News Corp) – where the applicants contended that there was "internal championing" for the purchase of Punters within News Corp that caused a price higher than "market value" to be paid and that, as a result, the parties did not deal with each other at arm's length – where the ultimate approval for the purchase of Punters was made by a head office in New York that was removed from News Corp's Australian operations – whether the applicants were at arm's length to News Corp Investments within the meaning of s 116-30 of the Income Tax Assessment Act 1997 (Cth) – appeal dismissed TAXATION – where the applicants contended that News Corp included "special value" in its purchase price for Punters that resulted in a price that was not "market value" – where the applicants led expert evidence that excluded this "special value" from the valuations of the Punters shares on the basis of valuation guidelines issued by the respondent Commissioner – whether "special value" forms part of the "market value" of an asset – whether the Commissioner's valuation guidelines misstated the law