Mowling v Commissioner of Taxation (Cth) [1954] HCA 57

High Court of Australia Taylor J. Mowling v Commissioner of Taxation (Cth) [1954] HCA 57

ORDER Declare that the amount of £855 being portion of the payments received by the appellant from the Colonial Mutual Life Assurance Society Limited during the year ended 30th June 1947 was not assessable income of the appellant and order that the amended assessment of 21st June 1949 be amended accordingly. Further order that the respondent pay the appellant's costs of the appeal.

Cur. adv. vult.

Taylor J. delivered the following written judgment:—

Nov. 8 Taylor J.

This is an appeal from a decision of a Board of Review which, by a majority, dismissed the appellant's appeal against an amended assessment to income tax based upon income derived during the year ended 30th June 1947. For the purpose of the amended assessment the taxpayer's assessable income was increased by the sum of £855, being part of the payments on account of an annuity which she had received during that year, in the circumstances hereinafter referred to, from the Colonial Mutual Life Assurance Society Ltd. The taxpayer's objection was to the inclusion of this sum.

The husband of the taxpayer died in May 1934 and by his will he bequeathed to his trustees the annual sum of £1,000 to be held by them upon trust to pay the same to his wife during her life, unless and until some event should happen whereby if the same income belonged to her absolutely, she would be deprived of the personal enjoyment thereof or any part thereof. In the event of the trust for the payment of the said income to his said wife determining or failing during her life, he directed his trustees during the remainder of her life or during such shorter period continuous or discontinuous as they should in their absolute discretion think fit, to pay all or any part of such income or apply the same for the maintenance and personal support and benefit of all or any one or more to the exclusion of the others or other of the following objects, namely, his said wife and her children or remoter issue for the time being in existence in such proportions and manner as his trustees should in their absolute and uncontrolled discretion from time to time think proper. Subject to such discretionary power the trustees were directed, during the remainder of the life of his said wife, to hold the said income or so much thereof as should not be applied under such discretionary power as part of his residuary estate. Following upon a direction to convert his real estate and the residue of his personal estate, the testator directed that, subject to the payment of his debts, funeral and testamentary, expenses, legacies and annuities and all duties whether Federal or State payable in respect of his estate, his trustees should invest in manner thereinafter authorized the proceeds of the sale calling in and conversion and stand possessed of such investments upon trust to pay thereout a number of pecuniary legacies and upon trust as to the ultimate residue for four named children in equal shares as tenants in common.