19 Mar 2009
PENNY & ANOR V COMMISSIONER OF INLAND REVENUE HC CHCH CIV-2007-409-1153
- Citation
- openlaw-1c631734_b2d4_4c7f_952f_54bc2ac4f96d.pdf
- Court
- High Court
Applying the scheme and purpose approach in Ben Nevis, the Court held that (1) incorporation of the private practices and derivation of fee income by the companies was a legitimate commercial choice consistent with the Income Tax Act and did not of itself constitute tax avoidance; (2) the Commissioner could not recharacterise or reconstruct salary levels on the basis of a non‑statutory 'commercially realistic salary' absent clear legislative prescription or operation of specific anti‑attribution rules; and (3) the overall arrangements (company formation, salary fixing, goodwill payments, divi…