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301:(1977) decided from it, were in a sense the demise of section 260. To the extent those schemes were regarded, in the mood of the time, as contrivances or outright avoidance, section 260 was failing in its apparent task. But the question of "avoidance" as opposed to taxpayers taking up concessions offered by the statute is not an easy one. Earlier, in the
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Section 52 — taxpayers obliged to advise the
Commissioner each year of assets held for the purpose of making a profit, i.e. trading, and therefore on which a loss would be a deduction (as opposed to investment assets, on which a loss was not deductible). This was effectively how share traders
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you must be able to predicate – by looking at the overt acts by which it was implemented – that it was implemented in that particular way so as to avoid tax. If you cannot so predicate, but have to acknowledge that the transactions are capable of explanation by reference to ordinary
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had given his now often quoted warning about section 260: "Section 260 is a difficult provision, inherited from earlier legislation, and long overdue for reform by someone who will take the trouble to analyse his ideas and define his intentions with precision before putting pen to paper."
359:
Part IVA (sections 177A to 177G). Part IVA of the 1936 Tax Act is a
General Anti Avoidance Provision (‘GAAR’) which can apply to strike down any Australian income tax benefits arising from a scheme where the Commissioner of Taxation, who is the head of the
276:(1957) where a taxpayer who made a choice between alternatives explicitly offered by the legislation (in that case a public versus private company) did not come under section 260. This was called the "choice principle" and it spawned
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remarked on that (referring to the 1915 act), saying "The section, if construed literally, would extend to every transaction whether voluntary or for value which had the effect of reducing the income of any taxpayer."
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Section 99A — tax on undistributed income of a trust, at the top personal rate plus medicare levy. This penal rate ensures trusts such as listed property trusts always distribute all their income.
236:(and it seems in a prior act from 1895). The history of the section is principally the history of the interpretation of its wording by the courts. The wording was notably broad; as early as 1921,
229:"Void against the commissioner" meant such a contract would be ignored for taxation determination, but was still enforcible by the parties against each other (the same as any other contract).
384:(or the like) advised they were in that business. Making a declaration stopped an investor deciding "after the fact" that a loss was "trading" but a gain was "investing" (tax-free prior to
282:(1976) which extended that to allow taxpayers to deliberately put themselves into circumstances described by the act (even if by unusual transactions) without coming under section 260.
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Sections 160ZB(6), 26BB and 70B — taxing traditional securities, such as convertible notes (interest bearing notes convertible into shares), as income rather than capital gains.
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The reason for rewriting the act is that amendments over the years have made it thousands of pages long, and very complex. Amendments have also created subsection upon subsection.
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That invitation for analysis and reform was not taken up until, it seems, court decisions started going in favour of the taxpayer, at which point the issues discussed in the
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Section 260 was the initial general anti-avoidance provision in the act, present from its inception in 1936 and operative until 27 May 1981. The section held any contract
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In consequence, the courts, of necessity, "read down" the section so it would not apply to every transaction, that obviously not being the legislature's intention.
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paid up to 12 months in advance on an investment loan. Lenders often promote such pre-payment (near the end of the tax year) as a tax advantage.
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of minors at penalty rates. This is an anti-avoidance provision to stop parents putting investments in the names of their children.
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investment bonds. Gains on policy surrender etc. are taxed as income unless held for 10 years. Introduced in 1983.
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An Act to consolidate and amend the Law relating to the
Imposition Assessment and Collection of a Tax upon Incomes.
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case were indeed considered in constructing the new Part IVA, replacing section 260 as of 27 May 1981.
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defeating, evading, or avoiding any duty or liability imposed on any person by this Act; or
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business or family dealing ... then the arrangement does not come within the section.
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relieving any person from liability to pay any income tax or make any return;
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The section was present in essentially the same form in the
Commonwealth
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703:(HTML with annotations and hyperlinks showing where amended etc.)
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A somewhat different stream of interpretation was established in
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Division 6AA, being sections 102AA to 102AJ — tax on the
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is calculated. The Act is gradually being rewritten into the
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W P Keighery Pty Ltd v
Federal Commissioner of Taxation
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preventing the operation of this Act in any respect;
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438:Deputy Federal Commissioner of Taxation v Purcell
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337:Sections 82KZL to 82KZO — deductibility of
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614:Trends and Issues in Crime and Criminal Justice
257:, a kind of "predication" test was described.
326:Section 26AH — the "ten-year rule" for
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693:(each amended form of the act, as big files)
579:Cridland v Federal Commissioner of Taxation
553:Slutzkin v Federal Commissioner of Taxation
527:Mullens v Federal Commissioner of Taxation
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635:Federal Commissioner of Taxation v Newton
467:Newton v Federal Commissioner of Taxation
202:altering the incidence of any income tax;
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224:to be void as against the Commissioner.
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717:Acts of the Parliament of Australia
661:, N. E. Renton, 2nd edition, 2005,
610:Australian Institute of Criminology
428:Melbourne University Law Review 30.
99:Australian House of Representatives
89:States and territories of Australia
305:case (in the High Court in 1957),
16:Act of the Parliament of Australia
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490:(on appeal from Australia).
424:Melbourne University Law Review
128:Income Tax Assessment Bill 1935
697:Income Tax Assessment Act 1936
687:Income Tax Assessment Act 1936
234:Income Tax Assessment Act 1915
179:Income Tax Assessment Act 1997
157:Income Tax Assessment Act 1936
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605:Thinking about Tax Avoidance
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418:Pagone GT (28 April 2024).
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659:Income Tax and Investment
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169:. It is one of the main
722:Income tax in Australia
646:577 (31 May 1957),
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261:in his judgement said:
167:Parliament of Australia
78:No. 27, 1936 as amended
39:Parliament of Australia
727:1936 in Australian law
472:[1958] UKPC 14
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640:[1957] HCA 99
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532:[1976] HCA 47
486:1 (7 July 1958),
442:[1921] HCA 59
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378:Superseded provisions
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558:[1977] HCA 9
506:[1957] HCA 2
115:Legislative history
238:Chief Justice Knox
85:Territorial extent
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711:Categories
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592:High Court
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514:High Court
454:High Court
446:(1921) 29
405:References
175:income tax
50:Long title
650:at p 597.
393:See also
339:interest
298:Cridland
292:Slutzkin
171:statutes
148:In force
67:Citation
699:at the
287:Mullens
188:The Act
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315:Newton
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161:is an
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295:and
285:The
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