Commissioner of Taxes v Executors of the Estate of Mark Rubin [1930] HCA 21

H.C. or A. 1930.

BrisBaNE,

June 12, 13.

SypNey, Aug. 14.

Isaacs C.J., Rich and Starke JJ

HIGH COURT

[HIGH COURT OF AUSTRALIA.)

THE COMMISSIONER OF TAXES .

AND

THE EXECUTORS OF THE ESTATE OF )

MARK RUBIN, DECEASED . . ) /2SPONDE ON APPEAL FROM THE SUPREME COURT OF QUEENSLAND.

Income Tax (Q.)—Net gains or profits arising from sale of property—Shares by testator—Executors' liability to taxation—Fictional sale—Charging statute— Basis of assessment—Market price—Private company—Shares not listed stock exchange—Shares never offered to public—No marketable price ever quoted— Income Tax Acts 1902-1920 (Q.) (2 Edw. VII. No. 10—10 Geo. V. No. 35), see. 12a*—Income Tax Act Amendment Act 1921 (Q.) (12 Geo. V. No. 19), sec. 4.*

The testator and two others carried on business in a partnership which subsequently converted into a private company, all shares being held bj testator, the members of the testator's family, his two former partners, a1

the members of their families.

*The Income Tax Acts 1902-1920 (Q.) provide, by sec. 124, that "incomes liable to tax shall expressly include— (L) As income derived from personal exertion . (2) All net gains or profits arising from the sale of any personal property whatsoever—whether or not arising or accruing from any business carried on by the taxpayer." By sec. 4 (5) of the Income Tax Act Amendment Act of 1921 it is provided that "For the purpose of any of the foregoing provisions under this heading (lL)... (a) Transfers. of any property including live-stock by any person to any other person by way of gift or for a nominal or manifestly inadequate consideration, or to any beneficiary under any will or in the distribution of any intestate estate; or (6) the taking over of a taxpayer's estate on his death by an executor or

Under the articles of association of company the shares could not be listed on the stock exchange.