Commissioner of Taxation (Cth) v Forsyth [1981] HCA 15

High Court of Australia Stephen, Mason, Murphy, Aickin and Wilson JJ. Commissioner of Taxation (Cth) v Forsyth [1981] HCA 15

ORDER Appeals allowed. Order of the Full Court of the Federal Court (other than that part of the order which relates to the payment of costs) set aside and in lieu thereof order that the appeals to that Court be allowed and that the original assessments be confirmed. Order that the appellant pay the respondent's costs of the appeals.

Cur. adv. vult.

The following written judgments were delivered:—

1981, April 1 Stephen J.

I have, in the case of Handley v. Federal Commissioner of Taxation [1] , expressed my views upon the question of s. 51 (1) of the Income Tax Assessment Act and its application to socalled home office expenses. These appeals also relate to such expenses but in this instance they consisted of weekly payments in the nature of licence fees payable in respect of the taxpayer's use for professional purposes of a study and associated facilities. No question of apportionment arises.

1. Ante, pp. 185-193.

The study and associated facilities formed an integral part of the house which the taxpayer and his wife and family occupied as their home. The taxpayer and his wife, as the trustees of a family trust, were the owners of the house and as such granted the licence to the taxpayer.

The Commissioner conceded that the licence arrangement was genuine and effective and that the area so licensed was used by the taxpayer entirely for his professional purposes as a barrister although forming a part of his home.

The Commissioner denied to the taxpayer the deduction of such licence fees but by a majority they were allowed on a reference to a Board of Review. The Commissioner's appeals to the Supreme Court of Victoria (Murphy J.) and thence to the Federal Court of Australia (Bowen C.J., Deane and Fisher JJ.) were unsuccessful; hence the present appeals to this Court.