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McPartland v FCT [2023] FCA 1260 – Federal Court upholds Tribunal decision despite legal errors
The Federal Court has upheld an AAT decision affirming default assessments issued by the ATO, finding that it had not been shown the material before the AAT was capable of supporting a conclusion as to what the taxpayers’ assessments ought to have been (and therefore that the taxpayers could not have discharged their onus under section 14ZZK of the TAA 1953). This was despite the Court also concluding that the Tribunal erred in law in overlooking or misunderstanding some of the taxpayer’s evidence and arguments.
Appeals – Michael John Hayes Trading
The Commissioner has appealed to the Federal Court against the AAT’s decision in Michael John Hayes Trading Pty Ltd as trustee for MJH Trading Trust v FCT [2023] AATA 3005. In that case, the Tribunal held a distribution of fully franked dividends following a group restructure was not made as part of a dividend stripping scheme because:
- although the taxpayers received the dividends free of tax, the original shareholders did not receive a capital sum as a substitute for taxable dividends; and
- the required tax avoidance purpose was not present.
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