The Resource Burton v Commissioner of Taxation : [2018] FCA 1857

Burton v Commissioner of Taxation : [2018] FCA 1857

Label
Burton v Commissioner of Taxation : [2018] FCA 1857
Title
Burton v Commissioner of Taxation : [2018] FCA 1857
Contributor
Subject
Language
eng
Summary
Judgment by the Federal Court of Australia, decision date 27 November 2018. The case deals with the calculation of foreign tax credits. The taxpayer was resident in Australia but derived gains from the sale of capital assets in the US. These assets had been held for over a year which meant they qualified for concessional treatment. In the US this took the form of a concessionary tax rate of 15% rather than 35%. In Australia, this took the form of a reduction by 50% of the capital gain made when calculating the net capital gain on which tax was levied. The taxpayer paid the US tax and then claimed a foreign income tax offset against the Australian tax due on those gains. The Commissioner disallowed an offset to the extent of 50% of the US tax paid. The taxpayer appealed arguing that the US tax paid had been paid 'in respect of an amount included in your assessable income for the year' (Income Tax Assessment Act 1977, s 770?10(1)) and alternatively that s 770-10(1) was overridden by art 22(2) of the Australia-US double taxation agreement which referred to a taxpayer being entitled to a credit 'against Australian tax payable in respect of the income'. The Federal Court has confirmed that the legal mechanism by which the 50% capital gains tax allowance means that only 50% of the foreign tax paid on a discounted capital gain will be eligible for a foreign tax credit
Citation source
In: International tax law reports. - London. - Vol. 21 (2019), part 4 ; p. 526-560
Geographic coverage
North America
Language note
English
http://library.link/vocab/relatedWorkOrContributorName
Baker, P
http://library.link/vocab/subjectName
  • case law
  • double taxation relief
  • capital gains tax
  • foreign tax credit
  • tax treaty
  • domestic tax law
Label
Burton v Commissioner of Taxation : [2018] FCA 1857
Instantiates
Publication
Label
Burton v Commissioner of Taxation : [2018] FCA 1857
Publication

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