Case Note on Fletcher v FCT (1991) 22 ATR 613:

The facts of this case were that the taxpayer (and three others in partnership) entered a complex scheme, which knobbed the partnership, and annuity and loan arrangements. The scheme was financed through a serial publication of round robin cheques and promised substantial subtractions in the first louvre years of the 15-year plan. A number of documents were exchanged neverthe slight no cash payments were made. This was calculated to return neutral cash flows with high tax deductions initially and high assessable income, especially in the last 5 years. A feature of the scheme was that at that place was an opportunity to terminate it in the last five years. In the relevant year the partnership derived assessable income of $170,000 and claimed deductions of $360,000. The recognize earlier the court was whether the taxpayers were entitled to a deduction for interest. A lot of matters were argued forrader the case reached the High Court but before the Full Court the Commis sioners contention was that the interest deduction should apportioned and disallowed under s 51(1) to the extent that it exceeded the partnership income. Their honour indicated that if a taxpayers costs in deriving income were less than the real(a) income, the deductions would be allowable.

However, if the costs exceed the income derived, the taxpayers design for making the spending whitethorn be relevant in characterizing and apportioning the consumption for the answer of the general deduction provision. This may include the taxpayers purpose for incur the expenditure. Manson CJ, Brennan, Deane, Dawson, Toohey , Gaudron and McHugh JJ said (at ATR 622-3):! ...The position may, however, well be assorted in the case where no relevant assessable income female genitalia be identified or where the relevant assessable income is less than the tally of the outgoing...the disproportion between outgoing and income, the whole outgoing is by rights to... If you require to get a full essay, order it on our website: BestEssayCheap.com

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