McFarlane v Federal Commissioner of Taxation [1925] HCA 2

H.C. oF A. 1925. ~

Sypyey,

April 6, 7.

Knox C.J., Isaacs and Rich JJ.

HIGH COURT

McFARLANE - we a * - APPELLANT ;

AND

THE FEDERAL COMMISSIONER -OF es |

War-time Profits Tax—Assessment—Capital of business—Asset created or acqui without purchase—Land used in business—Land of wife used by taxpayer without binding agreement—War-time Profits Tax Assessment Act 1917-1918 (No. 93 of 1917—No. 40 of 1918), secs. 16, 17.

In 1908 the appellant, who carried on the business of a grazier on land belonging to him in fee simple, transferred portion of the land to his and at the same time she made a will devising the transferred land to th appellant in fee simple and executed a deed by which she covenanted with the appellant not to revoke the will so far as it related to the transferred Iand- and not to deal with such land so as to defeat or prejudicially affect the d At the same time the appellant stated to his wife that he would continue t use the transferred land in his business, and he did so continue to use it

between them as to the use of the transferred land.

Held, that in determining the capital of the business as existing at the of the last pre-war trade year, for the purposes of the War-time Profits Assessment Act 1917-1918, the value of the transferred land was pro omitted from consideration.

Case Sraveb.

an assessment for war-time profits tax for the year ended 30th 1917, Rich J. stated a case, which was substantially as follows, the opinion of the Full Court :—

CLR.) OF AUSTRALIA.

1. Prior to and in the year 1908 the appellant was carrying on the business of a grazier on certain lands then held by him in fee

Young in the State of New South Wales.

2. In the year 1908 the appellant transferred to his wife, Clara Lily McFarlane, in fee simple portion of the said lands, such portion containing an area of about 2,692 acres.