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 involved the partnership, and annuity and loan arrangements. The scheme was financed through a series of round robin cheques and promised substantial demonstrations in the first cinque years of the 15-year plan. A number of documents were exchanged entirely no cash payments were made. This was calculated to return neutral cash flows with treble tax deductions initially and high assessable income, especially in the last five 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 cut off 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 Commissioners conte ntion 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 slight than the true income, the deductions would be allowable.

However, if the costs exceed the income derived, the taxpayers design for making the disbursement whitethorn be relevant in characterizing and apportioning the outlay for the finding of the general deduction provision. This may include the taxpayers purpose for incur the expenditure. Manson CJ, Brennan, Deane, Dawson, Toohey, Gaudron an d McHugh JJ said (at ATR 622-3): ...The posi! tion may, however, well be divergent in the case where no relevant assessable income understructure 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 correctly to... If you require to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay