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The Drought Breaks - The Courts Unleash a Deluge

Published on 20 Mar 2003 | Took place at Leonda by the Yarra, Hawthorn, VIC

The pace of tax reform has seen the technical focus of tax advisers on new laws and associated rulings and determinations. This seminar focussed attention back to our Courts and their importance in the interpretation of our tax laws.

Since the Commissioner's negative ruling TR 1999/5, participants in employee benefits arrangements (EBAs) have been waiting for a case to determine the validity of EBAs. In the meantime, the Commissioner has been inviting taxpayers involved in EBAs to settle multiple assessments imposing FBT, additional income tax and large penalties.

The case law drought broke in December 2002 when the Federal Court ruled on an employee incentive arrangement in Essenbourne. The case was a mixed result for the Commissioner. While the Commissioner was successful, the case established obstacles for the Commissioner's alternative FBT, Part IVA assessments and raised issues for advisers in determining and structuring allowable deductions.

Individual sessions

The Drought Breaks - The Courts Unleash a Deluge

Author(s):  Graeme HALPERIN In this seminar paper, Graeme Halperin reviews the results in Essenbourne in the context of the Commissioner's attack on employee benefits arrangements (EBAs) generally and the wider implications for obtaining deductions in business structures.

In addition, Graeme reviews tax planning and Part IVA cases which have come before the courts in the last 18 months or so, and examines why the ATO is performing poorly in so many of them, why the ATO wins the few cases that it does win, and how the ATO's losses and wins can be reconciled.

Materials from this session: