Compton v Commissioner of Taxation (Cth) [1966] HCA 1

Compton v Commissioner of Taxation (Cth) [1966] HCA 1

The appeals failed because cl. 28 of the deed required the trustees, on request, to reimburse constituent companies from a member's account for long service leave payments or liabilities. That provision was for the benefit of the employers, not employees, and was not merely incidental. The fund therefore was not established wholly as a provident, benefit or superannuation fund for the benefit of employees within s. 23 (j) (i), so its income was not exempt.

Jurisdiction
Australia
Procedural Posture
Income Tax Appeals / Appeals to the Full Court From the Dismissal by Taylor J. of Appeals Against Income Tax Assessments
Outcome
Appeals dismissed with costs.
Legal Topics
['income Tax Exemption' 'provident, Benefit or Superannuation Fund' 'fund Established for the Benefit of Employees' 'application of Fund for Established Purpose' 'employer Benefit Under Trust Deed' 'long Service Leave Reimbursement']
['taxation' 'trusts' 'superannuation'] ['income Tax Exemption' 'provident, Benefit or Superannuation Fund' 'fund Established for the Benefit of Employees' 'application of Fund for Established Purpose' 'employer Benefit Under Trust Deed' 'long Service Leave Reimbursement']

Case Brief

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Procedural Posture

Income Tax Appeals / Appeals to the Full Court From the Dismissal by Taylor J. of Appeals Against Income Tax Assessments

Legal Issues

  1. 1 ['Whether the F. H. Compton & Sons (Superannuation Fund) was a provident, benefit or superannuation fund established for the benefit of employees within s. 23 (j) of the Income Tax and Social Services Contribution Assessment Act 1936-1957.' 'Whether the fund was being applied for the purpose for which it was established.' "Whether cl. 28, requiring reimbursement to constituent companies for long service leave payments or liabilities from a member's account, meant the fund was established partly for the benefit of employers rather than employees."]

Ratio Decidendi

The appeals failed because cl. 28 of the deed required the trustees, on request, to reimburse constituent companies from a member's account for long service leave payments or liabilities. That provision was for the benefit of the employers, not employees, and was not merely incidental. The fund therefore was not established wholly as a provident, benefit or superannuation fund for the benefit of employees within s. 23 (j) (i), so its income was not exempt.

Court Disposition

Appeals dismissed with costs.

Orders

  • ['Appeals dismissed with costs.']