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13 (Ordinary Income)[1]

Investment company assessed on profit arising from

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Investment company assessed on  profit arising from sale of its shares  ( London Australia ) Leasing and lease Leasing and lease     incentive cases incentive cases § Taxpayers engaged in leasing activities  may be assessed on profits derived  from the sale of leased equipment  where this arises as an ordinary  incident of their business ( GKN  Kwikform )
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§ However, where the leased equipment  was not acquired for the purpose of  resale, gains from the sale of leased  equipment will usually be of a capital  nature ( Hyteco Cyclone Scaffolding ) § Lease incentive payments to move  business premises are generally  income ( Cooling, Montgomery ) Intellectual property and Intellectual property and     “know how” cases “know how” cases § Assessability depends on whether the  profits arise in the ordinary course of  business or involve mere realisation of  capital assets: § Profits made from the sale of US  patents to a foreign company held to  be income   as the sale of patents was  not “a mere accidental dealing” ( Rees 
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Roturbo ) § Profits made by a drug manufacturer  from the sale of secret processes and  know-how held to be capital   as it was  received for parting with a capital item  which would bring the taxpayer’s  agency to an end ( Evans Medical  Supplies ) Debt defeasance cases Debt defeasance cases § A benefit that merely saves expenditure  is not usually income ( Tennant v Smith ) § However, a saving of expenditure may  constitute income if it arises in the  ordinary course of business:  § Debt defeasance arrangement  entered into by a finance company  ( Unilever )
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Isolated and extraordinary Isolated and extraordinary     transactions transactions § First strand of  Myer : § Gains made from extraordinary  transactions may be income where  they arise from commercial  transactions entered into by taxpayers  with the intention of making a profit § Second strand of  Myer: § Where a future right to interest is  converted into a present lump sum  amount, the present lump sum  amount will be income as it replaces  the future interest, which would have  been treated as income Income from property Income from property § Amounts that “flow” from the 
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usually income: § Rent received under a lease of  property ( Adelaide Fruit ) § Gains from the sale of capital assets  are not ordinarily income in nature § A taxpayer may convert what would  otherwise be capital consideration into  an income stream: § Annuities paid to a taxpayer for the  sale of land ( Ors ) § Payments received where no fixed  gross amount identifiable ( Moneymen 
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Investment company assessed on profit arising from sale of...

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