01 Mar 077 Deductibility of Budplan investment denied - MacphersonThe AAT has upheld the Commissioner's denial of deductibility of certain expenses purportedly incurred by the taxpayer in relation to an investment in a project described as Budplan "A" Series No 1. The prospectus for the project stated that "by participating in Budplan "A" Series No 1, a participant engages in the business of development for growing, sale, and licensing of the intellectual property of specified table grape varieties, or enhanced varieties, including the carrying out of all necessary scientific research and the growing for sale of table grapes". Part of the expenses were purportedly funded by a round robin loan arrangement. The AAT held that the loan was never made and thus the expenses never incurred. Alternatively, if wrong in this regard, the AAT held that the expenses were of a capital nature and thus non-deductible. Alternatively, if wrong in this regard, the AAT held that Part IVA applied to deny deductibility: Macpherson and FCT  AATA 1092 (AAT, Pascoe SM, 28 February 2007).
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