Egerton-Warburton v Deputy Federal Commissioner of Taxation [1934] HCA 40

Pll Bebe 4 Appl Graal' Reet | fy ERR er More dais, fear' amy fi, Inkster 20 Inkster 89 ALR 26S SP ATR EG faprpdierk Commissioner Ga Pa ATR 1516 'ALR 137 Hots ii vid iit i. 2h coin Eiiithont a a ecg BMG Savings Limited Commitoner' Commisioner roan 568 esti Helo HIGH COURT [ Refd to [HIGH COURT OF, AUSTRALIA.] EGERTON-WARBURTON AND OTHERS . APPELLANTS ; AND is THE DEPUTY FEDERAL COMMISSIONER i R ESPONDENT. OF TAXATION . H.C. or A. Income Tax (Cth.)—Assessment—Family arrangement—Transfer of land—Con- 1934. sideration—Payment by way of annuity to father and mother and survivor of them Sv —Lump sum to daughters—Annuity taxable—Deduction by persons paying PERTH, annuity—Outgoings incurred producing income—Income Tax Assessment Act Sept. 12, 17. 1922-1933 (No. 37 of 1922—No. 40 of 1933), secs. 4, 23 (1) (a), 25 (e). ich, Di xon

nd MeTiernan Jd.

By an agreement made by W. with his two sons, he sold certain lands to them, part of the consideration being that they should pay to him during his life an annuity of £1,200, During the year ending 30th June 1933 the sons paid W. £659 in equal shares in pursuance of the agreement. The Deputy Commis- sioner assessed W. for income tax in respect of the £659, and disallowed as a deduction from assessable income the sum of £329 10s. paid by each son. On appeal from this decision,

Held, that the sum of £659 was income of the father, not an instalment of a capital amount, and was therefore taxable, and that each sum of £329 10s. was an allowable deduction in the sons' assessments, as representing money laid out for the production of assessable income.

CASE STATED.

The appellants, Randle Egerton-Warburton, Piers Edward Egerton-Warburton and George Gray Egerton-Warburton, each appealed from a decision of the respondent, whereby he disallowed objections made by the appellants to assessments in respect of income tax. The appeals coming on for hearing before Dixon J., he consolidated the appeals and agreed to state a special case for the opinion of the Full Court, under sec. 51a (8) of the Income Tax Assessment Act 1922-1933.