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16 Feb 12 High Court dismisses taxpayer's special leave application on the meaning of "income" - Allen

The High Court (French CJ and Bell J) has dismissed the taxpayer's application for special leave to appeal from the decision of the Full Federal Court in Allen (Trustee), in the matter of Allen's Asphalt Staff Superannuation Fund v FCT [2011] FCAFC 118 (7 September 2011).

The Full Federal Court held that the term "income derived" in the former s 273(7) ITAA 1936 included amounts of ordinary and statutory income and was not restricted to ordinary income. On this basis, a distribution received by the trustees of a superannuation fund (the Fund) constituted "special income" in the hands of the Fund and was taxable at the rate of 47% rather than 15%.

In dismissing the application, French CJ said:

"A key question raised by the applicants is whether the term “income” there refers to income according to ordinary concepts. The application for special leave raises a question of statutory construction in a particular context. The Full Court adopted the construction which it did by reference to both purpose and context. In so doing, in our opinion, it applied correct principle. The decision is unattended with sufficient doubt to warrant the grant of special leave."

For a copy of the transcript of the special leave application, go here


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