Cooper v Federal Commissioner of Taxation [1958] HCA 46

Cons

ag Lanseny 100 C.L.R.] OF AUSTRALIA. 131 [HIGH COURT OF AUSTRALIA.) COOPER F é : : Z é i . APPELLANT ;

AND

FEDERAL COMMISSIONER OF TAXATION RESPONDENT.

Income Tax (Cth.)—Assessable income—Allowable deduction—Premium—Paid in H.C. or A. respect of land etc. used for the purpose of producing assessable income—Where 1958. in year of income taxpayer is lessee of the land etc. or in the case of a premium a paid for the surrender of the lease he would have been lessee had the lease been MELBOURNE, transferred to him and he had not been entitled to the reversion—Right of taxpayer May 19, 20; paying premium to elect that period of lease unexpired at date of payment of Ot. 23. premium be deemed to be two years where lease of " indefinite duration" —Lease pixon 0.3.4 granted in 1936 by taxpayer to six persons until death of survivor of such persons Pullagar or for thirty-five years whichever longer—Whether persons took as joint tenants Taylor JJ. or in common—Whether estate granted one of freehold or leasehold—Whether lease of ' indefinite duration "—Death of one of six persons in 1938—T'ransfer to taxpayer by registered transfer of his interest by his administrator in 1951— Whether merger in taxpayer's estate in fee simple—Transfers by other five persons each of his interest to taxpayer in 1952 in consideration of an annuity to each for twelve years—Whether annuity payments in year of income an allowable deduction —Scope of statutory provisions—Income Tax and Social Services Contribution Assessment Act 1936-1956 (No. 27 of 1936—No. 25 of 1956), #8. 83 (1), 88 (1) (5) —Dransfer of Land Act 1893-1950 (W.A.), 8. 82.

'As of 5th September 1936 a taxpayer who was the owner in fee simple of land on which stood an hotel made an indenture with six members of a family named Guilfoyle. 'The indenture provided that the taxpayer as lessor demised and leased to the Guilfoyles as lessees the said land " to hold to the lessees until the death of the survivor of " them " or for the term of thirty-five years commencing on 6th September 1936 whichever term be the longer period of time". There were no words of severance in the indenture or any express provision clearly indicating that the estate or interest was taken by the lessees other than jointly. Disputes which had arisen between the five surviving Guilfoyles and the taxpayer were settled in 1952 and in accordance with the terms of settlement each transferred his share or interest expressed to be a one-sixth undivided share to the taxpayer in consideration, inter alia, of an annuity of £780 to be paid to each of the five by the taxpayer for twelve