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Bell v FCT: Uncertainties in the small business CGT concessions
Published on 01 Jul 13 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
The small business capital gains tax concessions in Div 152 of the Income Tax Assessment Act 1997 are widely utilised by taxpayers who are disposing of their businesses. Two recent cases in the Federal Court, FCT v Byrne Hotels Qld Pty Ltd and Bell v FCT, have, however, caused some uncertainty about the application of the concessions.
This article examines the implications of these cases. In the author’s view, the Byrne Hotels case has expanded the scope of the liabilities that can be included in the maximum net asset value (MNAV) test to some contingent liabilities, but leaves some uncertainty as to the precise types of contingent liabilities that can be included in the MNAV calculation. Bell’s case was unable to resolve this uncertainty due to the abandonment of the issue on appeal. Practitioners should be aware of the complexities with contingent liabilities when utilising the small business CGT concessions.
Author profile
Dr Philip Bender ATI
Dr Philip Bender, ATI is a barrister at the Victorian Bar. He is the author of Bender’s Australian Stamp Duties, published by the Tax Institute. He acts in Federal and State taxation, superannuation, and trusts and estates matters for taxpayers and revenue authorities. In the trusts area, he has acted in many taxation disputes involving trusts issues, and has acted in many trusts matters involving, amongst other topics, trust deed and will interpretation, alleged breaches of trust; trustee removal applications; judicial advice; charitable trusts; and superannuation death benefits disputes. - Current at 06 March 2023
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