CLAW3201 Lecture Notes - Lecture 8: Stamp Duty, Investment Company, Aust
27 Oct 2018
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Fct v total holdings (aust) pty ltd (1979) 79 atc 427 investment company received interest-bearing loans from parent company. On-lent to its subsidiary, some of which were interest-free. Interest expenses attributable to interest-free loan deductible as original loans were designed to render subsidiary more profitable and thus generate ai for the taxpayer. Expenses on wrongdoing s 26-5(1) itaa 1997 in general, penalties payable under an australian law or a foreign law are not deductible: however, if legal expenses are for defending against charges, can be deductible provided sufficient nexus. Magna alloys & research pty ltd v fct (1980) 11 atr 276 expenses to protect company"s ability to carry on business and thus gain or produce ai sufficient nexus. Day [2008] hca 53 legal expense in defending disciplinary charges brought against an individual by his employer arose out of employment sufficient nexus: theft loss of illegal proceeds.
