Moneys received in settlement of damages claim assessable as capital gain - Coshott
03 Sep 2014
The AAT has held that moneys received by the taxpayer in settlement of a damages claim against a third party were assessable as capital gain, as a result of the operation of s 104-25 ITAA 1997 (Cancellation, surrender and similar endings: CGT event C2).
The AAT rejected the taxpayer's submission that a broad principle applies "that damages by definition cannot be a capital gain since the purpose of damages is to return the plaintiff to his or her pre-damage position".
Coshott and FCT  AATA 622 (AAT, Professor Deutsch DP, 2 September 2014).