This week we discussed the fundamental basis for determining when a business is being operated, and when a business operator may deduct outgoings in relation to that business. We also discussed apportionment of interest costs and borrowing costs.
Next week, we will explore further issues and the additional reasoning of the Court.
This session continues our examination of the deductibility of interest, borrowing costs, and business-related outgoings within the context of Ure v FCT. Building on last week’s discussion, we will delve deeper into the Court’s reasoning and further issues arising from the case.
Discussion Focus:
- The fundamental principles that define when a business is being carried on, including the key indicators and factual considerations used by the Courts.
- When a business operator may deduct outgoings under s 8-1, including the characterisation of expenses and the connection to income-producing activities.
- Apportionment of interest costs and borrowing costs where borrowings serve mixed purposes (business, private, or trust/family benefit).
- How the Court approaches “fair and reasonable” apportionment and how these principles applied in Ure v FCT.
- Further reasoning from the Court, including distinctions between private/domestic expenditure and outgoings incurred in gaining assessable income.
- Continued exploration of how interest and borrowing expenses are treated where related-party loans or concessional loan arrangements are present.
Please see below link to case materials which is assumed reading in order to participate in the discussion:
Re Richard Michael Ure v the Commissioner of Taxation of the Commonwealth of Australia [1981] FCA 9
Discussion led by Llewellyn Wood