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11 Mar 10 Novation of agreement a disposal for deemed market value consideration - Orica

The Federal Court (Sundberg J) has held that the taxpayer (Orica) effected a disposal, by cancellation or discharge, of a Distribution Agreement as part of the sale of its pharmaceuticals business, for which it received total consideration of some $327 million. The taxpayer's argument that the value of the Distribution Agreement was nil was rejected by the Court. The Court applied the former s 160ZD(2)(c) ITAA 1936 to deem the consideration received by the taxpayer in respect of the disposal of the Distribution Agreement at $250.5 million: Orica Ltd v FCT [2010] FCA 197 (Federal Court, Sundberg J, 10 March 2010).


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