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    Taxation Law Week 6

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    maliamartinh
    The document discusses key principles of Australian taxation law: 1) To determine if a taxpayer is carrying on a business, courts examine factors like profit motive, organization/system, size and frequency of activities. 2) The Myer Emporium case established two principles - that commercial transactions outside normal business with profit motive can be taxed, and compensation takes the character of what it replaces. 3) Scottish Australian Mining and Whitfords Beach distinguished an isolated land transaction from engaging in a land development business following change in company control.

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    Taxation Law Week 6

    Uploaded by

    maliamartinh
    26 views1 page
    The document discusses key principles of Australian taxation law: 1) To determine if a taxpayer is carrying on a business, courts examine factors like profit motive, organization/system, size and frequency of activities. 2) The Myer Emporium case established two principles - that commercial transactions outside normal business with profit motive can be taxed, and compensation takes the character of what it replaces. 3) Scottish Australian Mining and Whitfords Beach distinguished an isolated land transaction from engaging in a land development business following change in company control.

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    taxation law uts week 6 notes and answer

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    Taxation law week 6

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    The document discusses key principles of Australian taxation law: 1) To determine if a taxpayer is carrying on a business, courts examine factors like profit motive, organization/system, size and frequency of activities. 2) The Myer Emporium case established two principles - that commercial transactions outside normal business with profit motive can be taxed, and compensation takes the character of what it replaces. 3) Scottish Australian Mining and Whitfords Beach distinguished an isolated land transaction from engaging in a land development business following change in company control.

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    © All Rights Reserved
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    26 views1 page

    Taxation Law Week 6

    Uploaded by

    maliamartinh
    The document discusses key principles of Australian taxation law: 1) To determine if a taxpayer is carrying on a business, courts examine factors like profit motive, organization/system, size and frequency of activities. 2) The Myer Emporium case established two principles - that commercial transactions outside normal business with profit motive can be taxed, and compensation takes the character of what it replaces. 3) Scottish Australian Mining and Whitfords Beach distinguished an isolated land transaction from engaging in a land development business following change in company control.

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    Taxation Law

    TAXATION LAW- Seminar 6:


    1. How do you determine whether a taxpayer is carrying on a business? Make sure you refer
    to any relevant cases, legislation, rulings and principles of tax law in your answer.
    ● Profit-making purpose
    ● Systematic/organised
    ● Size
    ● Frequency

    2. Explain the two strands of reasoning in the Myer Emporium case.


    ● 1st Strand:
    ○ Commercial transaction outside the normal course of business
    ○ Profit-making purpose at the time of entering the transaction
    ○ Profit assessable
    ● 2nd Strand:
    ○ Similar to the compensation principle, ie – the compensation payment takes
    the same character (eg, income or capital) as the amount which it replaces.
    ○ Compensation Principle Recap: The compensation payment takes the same
    character as the amount which it replaces.

    3. Compare the decisions in Scottish Australian Mining and Whitfords Beach. How may the
    facts in Whitfords Beach be distinguished from Scottish Australian Mining?
    ● Fishermen formed a company which had acquired land to provide fishermen with
    access to fishing shacks on the beach. (no intention for carry-on a business, just
    wanted access).
    ● Land value subsequently increased. Developers bought shares in the company (ie,
    change of control), and had the company develop/subdivide and sell the land. Court
    found that following the change of control, the company had ventured into a land
    development business. Taxpayer was assessed on the profit
    ● Isolated transaction can give rise to income (not the realisation of a capital asset as
    opposed to Scottish Australian Mining)

    4. Give three examples of income from property.


    ● Interest
    ● Rent
    ● Annuities

    5. Explain the reasons for the different outcomes in the decisions in McCauley v FCT and
    Stanton v FCT?

    6. Compare the decisions in Egerton-Warburton and Foley v Fletcher. How may the facts in
    Egerton-Warburton be distinguished from Foley v Fletcher?
    ● Foley and fletcher are about annuities
    ● Whether there is ;(a return of capital) or (payment of interest)- the first one is not
    taxable the second one is.

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