Commissioner of Taxation (Cth) v Belford [1952] HCA 73

High Court of Australia Dixon C.J. Webb, Fullagar, Kitto and Taylor JJ. Commissioner of Taxation (Cth) v Belford [1952] HCA 73

ORDER Question in the case stated answered that the income amounting to £A1,428 referred to in pars. (4) (5) and (6) thereof is the assessable income of Rollande Danielle Belford of the income year ended 30th June 1945. Costs reserved for the order of the judge disposing of the appeal.

Cur. adv. vult.

The following written judgments were delivered:—

Dec. 19 Dixon C.J.

This is a case stated pursuant to s. 18 of the Judiciary Act 1903-1950 in an appeal from a decision of the Board of Review under s. 198 of the Income Tax and Social Services Contribution Assessment Act 1936-1952. The appeal is by the commissioner from a decision that the taxpayer is not liable to include in her assessable income certain sums received by her during the year of income. The year of income in question is that ended 30th June 1945. During that year the taxpayer, who resided in Australia, received from the trustees of her father's will certain sums of money representing the income of a settled fund and of residue. The trustees were resident out of Australia and the income of the trust estate in which the payments were made was derived by the trustees from sources outside Australia. It was, however, derived by them during the same year of income. The amount thus received by the taxpayer was £A1,428. The commissioner included this sum in her assessable income, but on a reference to the Board of Review, the board decided that it was not liable so to be included. The question reserved by the case stated for our consideration is whether the amount is part of her assessable income.

The problem arises from the provisions of Div. 6 of the Income Tax Assessment Act 1936-1945 read with the definition of "taxpayer" contained in s. 6 and combined with par. (r) of s. 23 when they are considered with s. 25 (1) and s. 26 (b). A careful study of the provisions makes it clear that, for one cause or another connected with the history of the legislation, the reconciliation of the provisions is beset with verbal difficulties which cannot altogether be overcome. Division 6 which, although headed "Trustees", deals not only with trustees but with the liability of a beneficiary obtaining income from a trust estate, is based upon provisions introduced into the legislation at a time when the territorial liability for income tax was based exclusively on the source of the income and when residence was not a test of such liability. The difficulty of applying the provisions in relation to liability based on residence is the probable explanation of the trouble which has been experienced in solving the present problem.