24 Jan 12 Decision Impact Statement - Ashwick
The ATO has published a Decision Impact Statement in relation to the Full Federal Court's decision in FCT v v Ashwick (Qld) No 127 Pty Ltd & Ors  FCAFC 49; 2011 ATC 20-255. The case concerned whether multiple layers of deductions were allowable for bad debts, interest on borrowings and transferred tax losses, in relation to chains of loans between related companies within the Foster's Group. The Full Federal Court held that they were deductible and that Part IVA had no application.
The ATO has not appealed against the Full Federal Court's decision.
The Decision Impact Statement states that the case turns very much on its own facts and the findings made by the Federal Court. The ATO accepts the view that what is or is not in the ordinary course of a taxpayer's business of lending money must be determined by reference to the context in which the business was carried on by the taxpayer.