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Sole Luna Pty Ltd as Trustee for the PA Wade No 2 Settlement Trust v Commissioner of Taxation [2019]

TAXATION – allowable deductions – s 8-1 of the Income Tax Assessment Act 1997 (Cth) (the “1997 Act”) – Div 3B of Pt III of the Income Tax Assessment Act 1936 (Cth) –where trust advanced money to its subsidiary in multiple foreign currencies – where trust and its subsidiary were not Australian residents for tax purposes at the time of the advancements of monies – whether the advancements of monies constituted a loan or loans – where liability was repaid in part by way of payment of Australian dollars and an assignment of Australian dollar denominated receivables at a time when the trust and its subsidiary had become Australian residents for tax purposes – whether the trustee of a trust incurred a deductible loss arising from the repayment of foreign currency denominated loans – Div 775 of Pt 4-5 of the 1997 Act – whether forex realisation loss should be disregarded pursuant to s 775-35

TAXATION – capital loss – where loan was purportedly forgiven – whether a CGT event C2 occurred – whether the taxpayers discharged their onus of proving the cost base of the alleged loan TAXATION – penalties – where false statements made to the Commissioner – whether the taxpayer and its agent took reasonable care in connection with the making of the statement – whether the position taken by the taxpayers on the application of the law was reasonably arguable

Full decision here

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