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Is a “statutory fiction” necessarily a horror story for taxpayers?


Expert evidence is often relied on in taxation litigation, especially when provisions of the taxation legislation call for consideration of a hypothetical, such as a hypothetical transaction, sale or purchase price. Recent cases have highlighted that, in relation to these hypothetical situations, the usual procedures may have significant shortcomings. In three recent cases, expert evidence called by the taxpayers did not address the correct statutory question and therefore could not satisfy the taxpayer’s burden, ultimately because in each case the taxpayer construed the provision in question differently from the court.

These cases are concerning because of the possible perception that the taxpayer did not have the opportunity to adduce evidence to address the correct statutory construction, and the inefficient use of resources in adducing and considering extensive evidence which was, in the final analysis, of little or no relevance. This article provides an overview of each of the three decisions and then proposes potential alternative approaches to using expert evidence more effectively and efficiently in tax litigation.

Author profiles

Helen Symon S.C
Helen is one of the most experienced taxation silks in Australia, practising in both an advisory and a disputes to administration of taxation legislation, state duties, taxation of tribunals at all levels, representing both taxpayers and revenue brought by the Commissioner under the promoter penalties. Her recent experience includes appearances in the Full Federal Court hearings in cases such as SPI Powernet Pty Ltd v FCT, Pratt Holdings Pty Ltd v FCT FCT v BHP Billiton Ltd. - Current at 01 February 2016
Click here to expand/collapse more articles by Helen Symon.
Lucy Davis
Lucy is a Barrister with the Victorian Bar. - Current at 03 November 2016


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