Sladden v FCT [2023] AATA 3815 – AAT holds lump sum insurance settlement was assessable as income
The AAT has held that a lump sum settlement payment from an insurer to a policyholder in settlement of any and all claims relating to two linked policies of insurance (one of which was income protection insurance and the other life insurance) was assessable as income of the taxpayer in the year in which it was paid.
In making its decision, the Tribunal noted that the terms of the Deed of Settlement in accordance with which the payment was made were not determinative of the nature of the payment. Rather, the Tribunal could have regard to the facts and circumstances which led to the execution of the deed to determine the true nature of the settlement payment. As the taxpayer and their insurer had only considered the taxpayer’s claim under the income protection policy when negotiating the settlement, the Tribunal concluded that no part of the settlement was paid other than in respect of commutation of the taxpayer’s monthly income protection benefits. Consequently, the entire amount of the settlement sum was assessable income of the taxpayer.
Banktech Group Pty Ltd v FCT [2023] AATA 3850 – Supplies of cash withdrawal services subject to GST
The AAT has held that supplies of ‘cash withdrawal services’ using the taxpayer’s cash dispensing equipment in hotels and other venues were taxable supplies subject to GST. This was because the AAT did not accept that the supplies were input-taxed financial supplies of ATM services, on the basis that the taxpayer’s cash dispensing equipment:
- required intervention from venue staff;
- involved the use of multiple devices; and
- was not marketed as an ATM.
Meakins v FCT [2023] AATA 3852 – Deductions for holding costs of undeveloped land disallowed
The AAT has affirmed objection decisions in which the Commissioner disallowed deductions claimed in respect of holding costs for land that still remained undeveloped 17 years after it had been purchased. The Tribunal also upheld administrative penalties that were imposed on the taxpayer for recklessness, finding that the taxpayer had demonstrated gross carelessness in continuing to claim the relevant deductions after the ATO had raised concerns over such in prior income years and indicated they would not be allowed.
Came v FCT [2023] AATA 3951 – AAT holds transfer of foreign superannuation funds not assessable to taxpayer directly
The AAT has overturned the Commissioner’s decision to treat funds transferred by a taxpayer from their foreign superannuation fund to an Australian complying superannuation fund via an Emigrant Capital Account as assessable to the taxpayer directly, holding that the transfer was in fact assessable to the taxpayer’s Australian complying superannuation fund as the taxpayer had made a valid election pursuant to section 305-80 of the ITAA 1997.
The Tribunal reached this decision because it considered the Commissioner had adopted a strained interpretation of the relevant legislative provisions, and that following legislative change in 2007, there was no longer a requirement for there to be a direct payment from a foreign superannuation fund to a complying superannuation fund for a taxpayer to be able to make an election under section 305-80. |