Commissioner of Taxation v Anstis [2010] HCA 40

HIGH COURT OF AUSTRALIA

FRENCH CJ,

GUMMOW, HEYDON, KIEFEL AND BELL JJ

COMMISSIONER OF TAXATION APPELLANT

AND

SYMONE ANSTIS RESPONDENT

Commissioner of Taxation v Anstis [2010] HCA 40

11 November 2010

M64/2010

ORDER

Appeal dismissed with costs.

On appeal from the Federal Court of Australia

Representation

S J Gageler SC, Solicitor-General of the Commonwealth with S H Steward SC and L A Hespe for the appellant (instructed by Gadens Lawyers)

M L Anstis for the respondent (instructed by Michael Anstis)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Commissioner of Taxation v Anstis

Income tax – Assessable income – Respondent received periodic payments of youth allowance under Social Security Act 1991 (Cth) – Whether receipts income according to ordinary concepts.

Income tax – Allowable deductions – Respondent incurred certain expenses in undertaking university study – Respondent required to undertake full-time study to establish and retain entitlement to youth allowance – Whether expenses incurred in gaining or producing assessable income – Whether expenses of a private nature.

Words and phrases – "incurred in gaining or producing", "ordinary income", "private or domestic nature".

Income Tax Assessment Act 1997 (Cth), ss 6-5(1), 8-1, 51-1, 51-10, 51-35.

1. FRENCH CJ, GUMMOW, KIEFEL AND BELL JJ. The central issue in this appeal is whether certain expenses incurred by a student undertaking university studies may be deducted under s 8‑1 of the Income Tax Assessment Act 1997 (Cth) ("the 1997 Act") from the assessable income of that student as a recipient of a "youth allowance" payment. Provision for that payment is made by Pt 2.11 (ss 540-567F) of the Social Security Act 1991 ("the Social Security Act")[1]. 2. During the relevant period, the respondent (Ms Anstis) was enrolled as a full-time student undertaking a teaching degree at the Australian Catholic University. In her tax return for the year ended 30 June 2006, the respondent returned $14,946 as wages earned as a part-time sales assistant, and $3,622 received by way of youth allowance payments. She claimed as an allowable deduction an amount of $920 for "expenses of self-education", which was reduced from $1,170 by operation of s 82A(1) of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act"). The self-education expenses comprised the depreciation in value of a computer ($692), textbooks and stationery ($264), a "student administration fee" ($80), supplies for children during the respondent's teaching rounds ($75) and travel expenses other than to university ($59). 3. The Commissioner of Taxation ("the Commissioner") maintains that such expenses are not deductible by the recipient of a youth allowance under s 8‑1 of the 1997 Act. The Commissioner disallowed the deduction of $920, and later disallowed an objection by the respondent against the amended assessment issued to her. The respondent unsuccessfully sought review of the Commissioner's decision in the Administrative Appeals Tribunal. However, her application to the Federal Court (Ryan J) to "appeal" against the decision of the Tribunal was successful[2]. Thereafter, the Full Court (Finn, Sundberg and Edmonds JJ) dismissed an appeal by the Commissioner against the decision of Ryan J[3]. 4. The resolution of the Commissioner's appeal to this Court turns upon three questions. The first is whether youth allowance is assessable income under the 1997 Act. The second is whether the respondent's self-education expenses were incurred "in gaining or producing" her assessable income. And the third is whether, if the expenses were so incurred, they were nonetheless to be disallowed as being of a "private" nature. For the following reasons, the income was assessable, the expenses claimed were deductible and not of a "private" nature, and the appeal should be dismissed with costs.