Bookshelf

realised by the means contemplated from the outset; namely after Doyle’s Creek achieved its objective of obtaining an exploration licence by direct allocation. 12

It did not assist the taxpayers that the Trustee never received or expected dividends from Doyles Creek (as might be expected if the Trustee’s intention had been to derive profits from a long-term investment). Nor did it assist that Mr Poole had made statements to the ICAC and in related legal proceedings that he had no intention of “hanging around” to operate a coal mine, and various other evidence about realising the assets. At the time of acquiring the shares “a finite profit-making venture had been embarked upon” leading to the inference that the Trustee intended, when it acquired the shares, to dispose of them at a profit. 13

Accordingly, the gain on sale of the shares was taxable as ordinary income, not as a capital gain. TAKE HOME MESSAGES

To be taxable as ordinary income rather than a capital gain, a purpose of sale or resale for a profit must exist at the time of acquisition of the relevant property.

A possibility that the property may be resold is insufficient (the possibility of resale being present in every case of acquisition of property).

The actual mode by which the profit is achieved must have been contemplated by the taxpayer as at least one means of realising profit from the property, even if not the principal means.

Evidence about a taxpayer’s intentions may come from many sources including correspondence relating to the transaction, finance negotiations, planning applications, and even ICAC transcript.

Tax Files is contributed by members of the Taxation Committee of the Business Law Section of the Law Council of Australia. B

Endnotes 1 [2020] AATA 1014 (24 April 2020). 2 Capital gains are discounted by 50% for tax purposes if certain basic conditions are satisfied:

Division 115 of the Income Tax Assessment Act 1997 (C’th). 3 Section 14ZZK of the Taxation Administration Act 1953 (C’th). 4 At [29]. See FCT v Cassaniti [2018] FCAFC 212. 5 The Myer Emporium Ltd at 209-213; WestfieldLimited v Commissioner of Taxation (1991) 91 ATC 4234. 6 Parsons, RW, Income Taxation in Australia: Principles of Income, Deductibility and Tax Accounting (1985) at [2.498] – [2.500], cited in Greig v Commissioner of

Taxation [2020] FCAFC 25 at [241], [242]. 7 Westfield, per Hill J at 4,243 (emphasis added). 8 Statham at 4,075. 9 At [31], citing The Myer Emporium Ltd and FCT v

Cooling (1990) 22 FCR 42. 10 At [41]. 11 Greig (above) at [246]. 12 At [45] – [50]. 13 At [44], [51] – [53]. The circumstances relating to the issue of the exploration licence without a tender process were the subject of an ICAC (NSW) enquiry and related proceedings in which

Mr Poole gave evidence that was later used by the Commissioner of Taxation in these tax proceedings.

BOOKSHELF

M Crock The Federation Press 2020 PB $39.95 CHILDREN AND YOUNG PEOPLE IN ASYLUM & REFUGEE PROCESSES

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Representing children in refugee protection proceedings is complex work involving legal, psycho-social, welfare and cross-cultural issues. Children and young people are amongst the most vulnerable people affected by migration controls, especially when they are seeking asylum alone, without the support of a responsible adult. Their interaction with government systems in this area is known to cause them high levels of stress and anxiety.

M Guihot & L Bennett Moses LexisNexis Butterworths 2020 PB $88.99 ARTIFICIAL INTELLIGENCE, ROBOTS AND THE LAW

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ArtificialIntelligence, Robots andthe Law is a call to students, lawyers, technologists, academics, regulators and others to engage with the issues raised by new developments in these technologies. The authors take a systematic approach to defining the field and the many terms of art that have come to distinguish it. By doing so, they add to the creation of a consistent common language through which all parties can converse.

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