TEMPLATE OBJECTION NOTICE TO TAX OFFICE
DIVIDEND DEDUCTIONS
[INSERT DATE]
Private & Confidential
Deputy Commissioner of Taxation
Australian Taxation Office
PO Box 1130
PENRITH NSW 2740
Dear Sir/Madam
Notice Of Objection To Assessment [or Amended Assessment]
Taxpayer:
Tax File Number:
Assessment [or Amended Assessment] Number:
Date of Amended Assessment:
Year of income ended:
[INSERT]
[INSERT]
[INSERT]
[INSERT]
[INSERT]
I [INSERT NAME OF TAXPAYER] (‘the Taxpayer’), whose address of service is [INSERT
ADDRESS OR PO BOX OF TAXPAYER OR TAX AGENT], object to the above
assessment [or amended assessment] (‘the Assessment’) and claim that:
(a)
The Assessment should be set aside;
(b)
Alternatively, the taxable income under the Assessment should be reduced by
increasing the amount of deductions claimed against my assessable income by
[INSERT AMOUNT] for the year of income ended [INSERT YEAR], and the
taxable income of, and tax payable by, me should be recalculated accordingly;
(c)
The amount of additional tax imposed by way of penalty should be remitted or
reduced to nil; and
(d)
The shortfall interest charge, (if any), imposed in the Notice of Assessment, to the
extent it can be objected against (or in any case, I request that it) be remitted or
reduced to nil.
The grounds for objection upon which I rely are as follows:
Facts
[INSERT, DELETE OR AMEND RELEVANT FACTS AS APPROPRIATE]
1.
For the year of income ended [INSERT YEAR] I incurred interest of [INSERT
AMOUNT] to [INSERT name of lender] on money borrowed to acquire shares
in [INSERT name of entity in which shares were acquired]. To the extent that it
has not already been provided to the Tax Office, the following documentation is
enclosed to support this:
[INSERT, DELETE OR AMEND DOCUMENTS]
(a)
Loan or any other documentation showing the amount of money I
borrowed and that the purpose of the borrowing was to acquire shares in
[INSERT name of entity in which shares were acquired with money
borrowed]; and
(b)
2.
Bank or financial institution statements showing interest expenses for the
year of income ended [INSERT YEAR].
I have [had previously, or will in the future] received dividends of [INSERT
AMOUNT] from holding shares in [INSERT name of entity in which shares were
acquired with borrowed money] for the year of income ended [INSERT YEAR].
To the extent that it has not already been provided to the Tax Office, the following
documentation is enclosed to support this:
[INSERT, DELETE OR AMEND DOCUMENTS]
(a)
Dividend statements or any other documentation showing the receipt of
dividends from the company; and
(b)
Company Annual Report, company announcements or any other
documentation showing when and what amount of dividends will be paid
or can reasonably expect to be paid from being a shareholder in the
company in the future.
Arguments of the Taxpayer
[INSERT, DELETE OR AMEND ARGUMENTS AS APPROPRIATE]
3.
A total of [INSERT AMOUNT] of interest expenses on money borrowed to acquire
shares in [INSERT name of entity in which shares were acquired] were incurred
by me in the course of gaining or producing my assessable income, for the
purposes of S.8-1(1)(a) of the Income Tax Assessment Act 1997 (‘ITAA 1997’),
being the receipt of dividends. This contention is supported by the enclosed
documentation mentioned above or previously provided to the Tax Office.
4.
Further, the interest expenses incurred on money borrowed to acquire the shares
in [INSERT name of entity] were incurred with an expectation that I would receive
dividends from owning these shares.
This contention is supported by
Commissioner’s comments in Taxation Ruling IT 2606.
5.
Further, the interest expenses incurred were not preliminary to, and remote from,
any possible derivation of dividend income from acquiring the shares with the
money borrowed. This contention is supported by the decision of the Full Federal
Court in Federal Commissioner of Taxation v Total Holdings (Australia) Pty Ltd
[1979] FCA 30.
6.
Further, the interest expenses incurred prior to the receipt of dividends from
acquiring the shares with the money borrowed were incurred in ‘gaining or
producing my assessable income’ on the basis that:
(a)
the interest expenses were not incurred ‘too soon’, were not preliminary
to my income earning activities (i.e., receipt of dividends), and were not a
prelude to those activities;
(b)
the interest expenses were not private or domestic in nature and do not
fall within the negative limbs of S.8-1(2) of the ITAA 1997;
(c)
the interest expenses incurred prior to the derivation of dividend income
were not incurred at a point in time too soon, taking into account the kind
of income earning activities involved, that the necessary connection
between the interest expenses and the dividend income is lost;
(d)
the interest expenses were incurred with one end in view, the derivation
of dividend income; and
(e)
continuing efforts are [or were] undertaken in pursuit of that end.
This contention is supported by the decision of the High Court in Steele v Federal
Commissioner of Taxation 1999 HCA 7.
*
*
*
*
I declare that the information contained in this objection, and in any attached
documents, is true and correct.
Name:
Signed: