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23 Aug 10 Decision Impact Statement - Primary Health Care

The ATO has published a Decision Impact Statement  in relation to the Federal Court decision in Primary Health Care Limited v FCT [2010] FCA 419; 2010 ATC 20-181. The case concerned whether the trustee of a trust in which the taxpayer was the only beneficiary was entitled to claim deductions in respect of the decline in value of copyright in patient records, allegedly acquired from medical and dental practices.

The Court held that the trustee was not entitled to deductions in respect of decline in value of copyright in patient records, either because the copyright had not been acquired, or no consideration had been provided for it.

The Decision Impact Statement states that the Commissioner's views as set out in the explanation section of Taxation Determination TD 2005/1 in relation to the application of the capital allowance provisions to the sale of a medical practice, differ from the reasoning of the Court. The application of the decision to TD 2005/1, specifically paragraphs 9, 22 - 25, may lead to a different outcome to that expressed in the determination. The Commissioner will review TD 2005/1 to ensure that it is consistent with the Court's reasoning.


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