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20 May 1313 Taxpayer's appeal on "special income" dismissed - SCCASP Holdings

The Full Federal Court (Lander, Siopis and Gilmour JJ) has dismissed the taxpayer's appeal from the decision of Logan J in SCCASP Holdings as trustee for the H&R Super Fund v FCT [2012] FCA 1052 (26 September 2012).

Logan J held that a net capital gain, comprising a trust distribution to which the taxpayer, as trustee of a superannuation fund, was presently entitled, being "statutory income" within the meaning of s 6-10 ITAA 1997, was "derived" by the taxpayer as "special income" for the purposes of the former s 273(6) ITAA 1936. In arriving at that conclusion, Logan J reasoned that he was bound to follow a decision of the Full Federal Court in Allen v FCT [2011] FCAFC 118.

The taxpayer argued that it had not "derived" the income because it had not received it. In rejecting this argument, the Full Federal Court said, at para 58:

"There is no good reason, in our opinion, for reading s 273(6) of the ITAA 36 as requiring the trust to have actually received the income referred to in s 273(6) for it to be termed 'special income' of the trust. "

On this basis, Allen's case applied unless the Court was satisfied that it was "plainly wrong". The taxpayer was unable to so persuade the Court, and the taxpayer's appeal was dismissed.

SCCASP Holdings Pty Ltd as trustee for the H&R Super Fund v FCT [2013] FCAFC 45 (Full Federal Court; Lander, Siopis and Gilmour JJ; 10 May 2013)


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