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Course of business

Russell v Commissioner of Taxation [2011] FCAFC 10.  04.02.11.

per Dowsett J:

[70] As Barwick CJ said in Fairway Estates PL v FCT (1970) 123 CLR 153 at 166 [35]:

Further, in my opinion, there can be a course of business although as yet there is nothing more than an intention to carry on the business and a single transaction carried out in pursuance of that intention.

per Gordon J:

In [87] "In determining whether the partnership was “carrying on” an enterprise at the relevant time, intention or purpose of the acquisition is relevant but not determinative: see [69] to [71] of Dowsett J’s reasons for decision, and Commissioner of Taxation v Swansea Services Pty Ltd [2009] FCA 402; (2009) 72 ATR 120 at [73] to [75].

“Carrying on” an enterprise is defined in the GST Act as including “doing anything in the course of the commencement or termination of the enterprise”: s 195-1 of the GST Act [ie, A New Tax System (Goods and Services Tax) Act 1999 (Cth)].

Another way of asking the same question is sometimes to ask whether the “intention of the ... taxpayer is that the transaction is the first step in a business”: Ell v FCT [2006] FCA 71; (2006) 61 ATR 661 at [114].

There can be a course of business even if there is “nothing more than an intention to carry on” a business: Fairway Estates Pty Ltd v Federal Commissioner of Taxation [1970] HCA 29; (1970) 123 CLR 153 at 166.

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