Commissioner to appeal the Wentworth District Capital Decision

On the 17th September the Commissioner of Taxation indicated he would be appealing the decision handed down by the Federal Court of Australia on the 13th August of Wentworth District Capital.

This appeal was expected.

The Wentworth District Capital case concerned the income exemption status of a company limited by guarantee. At dispute was whether the company was entitled to that status on the basis it provided “community services”. The company held rights as a Bendigo Bank franchise formed in a small rural community in Victoria which had been abandoned by the big banks. The company was enormously successful, having been supported by the community. It expended all its profits in community projects. The Federal court had held that the test was whether the company was carrying out its objects (supporting the community), not how it gained it profits.

This case has themes similar to the Word Investments case. It will be interesting to see the outcome in the Full Federal Court

Peter Gell

Peter was admitted as a solicitor in 1981 and holds qualifications in law and a Masters degree in taxation conferred by the University of NSW. Peter practises in taxation advisory, estate planning and wills, probate and commercial law.