High Court of Australia

Commissioner of Taxation v Sharpcan Pty Ltd [2019] HCA 36

16 Oct 2019

Case Number: M52/2019

Before

Kiefel CJ, Bell, Gageler, Nettle, Gordon JJ

Catchwords

Income tax (Cth) – Allowable deductions – Where taxpayer had received percentage of income derived from 18 gaming machines operated by authorised gaming operator under Gambling Regulation Act 2003 (Vic) at its hotel premises – Where Gambling Regulation Act amended to provide for gaming machine entitlements ("GMEs") to be allocated directly to gaming venue operators – Where taxpayer bid for and was allocated 18 GMEs permitting it to operate gaming machines at its premises for ten years – Where taxpayer paid purchase price by instalments – Whether purchase price was outgoing on revenue account deductible under s 8-1 of Income Tax Assessment Act 1997 (Cth) ("1997 Act") – Whether purchase price was expenditure incurred to preserve (but not enhance) value of goodwill in relation to legal or equitable right with value to taxpayer solely attributable to effect on goodwill deductible under s 40-880 of 1997 Act.

Words and phrases – "asset of enduring value", "barrier to entry", "blackhole expenditure", "capital account", "capital asset", "CGT asset", "CGT cost base", "CGT event", "gaming machine entitlements", "goodwill", "motive", "objective purpose", "once-and-for-all outgoing", "practical and business point of view", "purchase price funded out of revenue", "revenue account", "statutory rights", "structural solution".

Gambling Regulation Act 2003 (Vic) – Ch 3, Pt 4A.

Income Tax Assessment Act 1997 (Cth) – ss 8-1, 40-880.
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