Skip to main content
shopping_cart

Your shopping cart is empty

Tax Cases: Do sell-back rights form part of a taxpayer’s income according to ordinary concepts?

Published on 01 May 07 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

On 27 February 2007 the High Court handed down the final decision in the case of Commissioner of Taxation v McNeil (“McNeil”) which considered the character of sell-back rights in the hands of the taxpayer in relation to her shareholding in St.George Bank Limited (“St.George”). The High Court held, overturning the decisions of both the Federal Court and Full Federal Court, that the sell-back rights that were held for the absolute benefit of the taxpayer constituted income derived by her and, therefore, that amount should be included as part of the taxpayer’s assessable income. Although the decision in McNeil only resulted in a small tax liability for the taxpayer in question, the decision also affected all of the other shareholders of St.George who were offered sell-back rights. More generally, the decision is likely to have an effect on other public companies seeking to issue sell-back rights to their shareholders as a way of capital reduction.

Author profile:

Vanessa Ritzinger
Vanessa is a Lawyer in Madgwicks Revenue Group. Current at 01 March 2010 Click here to expand/collapse more articles by Vanessa RITZINGER.
 
Copyright Statement