Hot off the press from last Friday 18th Sept 2020 at the Full Federal Court on appeal. The taxpayer (Eichmann v Commissioner of Taxation) wins landmark case!
This is a very important victory for small business capital gains. Had the ATO position been upheld there would have been massive implications for property assets used within business. This was a real iceberg moment that affects many businesses that own property used within their business.
On appeal to the full federal court, the taxpayer has prevailed. We particularly enjoyed the court’s rebuke of the Commissioner’s submission that the CGT concessions be applied restrictively. In our opinion (and the court’s apparently) the clear intent of inserting “concessions” in the tax law was / is to provide tax relief to the taxpayer.
“contrary to the Commissioner’s submissions, in our view the provisions conferring small business relief, being Div. 152 of Pt. 3-3 of the 1997 Act, should be construed beneficially rather than restrictively in order to promote the purpose of the concessions conferred by that Division”
Hopefully that ATO Commissioner does not request an appeal to High Court (unlikely but not out of the question).
You can read the transcript here http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC//2020/155.html
If you operate a small business and need help with small business capital gains tax matters please feel free to contact us.