25 Jun 13 Decision Impact Statement – Picton Finance Ltd
The decision concerned the tax treatment of the profit on the sale of shares in an Australian publicly listed company which were bought and sold on behalf of a company incorporated in Vanuatu.
The Tribunal found that the profit was assessable income of the taxpayer for both income years on the basis that the profit on the sale of the shares was derived as part of a profit-making undertaking or scheme. However, on the basis of information made available at and after the hearing, the Tribunal found that the incorrect value was used for the cost of the shares for the 2007 year. This affected the amount of profit to which the taxpayer was assessable.
The Tribunal concluded that the penalties had been correctly imposed. The Tribunal also found that there were no grounds for remitting the penalty, but noted that the penalty would be reduced upon the amendment of the 2007 assessment to take account of the Tribunal's decision.
In the ATO’s view, the Tribunal’s decision was based solely on the facts in this particular case. It should not create a precedent for cases in the future.