Atkinson v Commissioner of Taxation (Cth) [1951] HCA 64

Atkinson v Commissioner of Taxation (Cth) [1951] HCA 64

The quarterly payments of £39 were an annuity within s. 26 (c) because their true nature was the provision of an income during the period between the insured's death and the expiration of twenty years from the insurance date. The payments did not represent repayment of the premiums or instalments of invested capital; the number of premiums paid did not determine the policy moneys. The policy's formal description of a diminishing lump sum payable by quarterly instalments was not decisive, and the periodicity, amount, twenty-year limitation, and contrast with the separate lump sums of £100 and £900 showed that the quarterly payments were provided as income.

Jurisdiction
Australia
Procedural Posture
Reference From a Board of Review Pursuant to S. 196 (2) of the Income Tax Assessment Act 1936 as Amended / High Court Determination of Referred Questions
Outcome
First question in the reference answered Yes; second question did not arise; no order as to costs of the reference.
Legal Topics
['assessable Income' 'annuities' 'insurance Policy Payments' 'income Tax Assessment Act 1936 S. 26 (c)']
['taxation Law'] ['assessable Income' 'annuities' 'insurance Policy Payments' 'income Tax Assessment Act 1936 S. 26 (c)']

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Procedural Posture

Reference From a Board of Review Pursuant to S. 196 (2) of the Income Tax Assessment Act 1936 as Amended / High Court Determination of Referred Questions

Legal Issues

  1. 1 ["Whether quarterly payments of £39 under the deceased insured's heritage policy, amounting to £156 per annum and paid to his widow as executrix, constituted an annuity within s. 26 (c) of the Income Tax Assessment Act 1936 as amended and formed part of her assessable income."]

Ratio Decidendi

The quarterly payments of £39 were an annuity within s. 26 (c) because their true nature was the provision of an income during the period between the insured's death and the expiration of twenty years from the insurance date. The payments did not represent repayment of the premiums or instalments of invested capital; the number of premiums paid did not determine the policy moneys. The policy's formal description of a diminishing lump sum payable by quarterly instalments was not decisive, and the periodicity, amount, twenty-year limitation, and contrast with the separate lump sums of £100 and £900 showed that the quarterly payments were provided as income.

Court Disposition

First question in the reference answered Yes; second question did not arise; no order as to costs of the reference.

Orders

  • ['First question in the reference from the Board of Review answered—Yes.' 'No order as to costs of the reference.']