ARTICLE · 10 SEPTEMBER 2013

Tax, ongoing revenue v capital issues – share "traders"

Moore Australia

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Discussion of the recent AAT decision Hartley and Commissioner of Taxation [2013] AATA 601.

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The recent AAT decision Hartley and Commissioner of Taxation [2013] AATA 601 ('Hartley') found that the taxpayer was not in the "business" of share trading and supported the Commissioners postulate that he was an "investor". As a consequence, the taxpayer was denied revenue deductions for the losses incurred.

Was this the right question?

In the decision of August v Commissioner of Taxation [2013] FCAFC 85 ('August') it was clearly confirmed that assets that may ordinarily be investments could derive some income, not be trading stock, yet still be on "revenue" account. There would also be a need to have the requisite intention to sell for a gain – however this is conceded as being present in Hartley.

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