Crowe v Commissioner of Taxation

This case concerned an appeal by a taxpayer, Mrs. Gladys Veronica Crowe, against a decision of the income tax board of review, which had confirmed the Commissioner of Taxation's disallowance of a deduction claimed under section 82H (1) (a) (i) of the *Income Tax and Social Services Contribution Assessment Act 1936-1954*. The dispute centred on whether a premium paid on a life insurance policy taken out by a partnership on the life of Mrs. Crowe, one of the partners, was an allowable deduction from her assessable income.

The legal issues before the court were whether the premium paid on the life insurance policy was an amount "paid by the taxpayer" for insurance on her life, as required by section 82H (1) (a) (i). Specifically, the court had to determine who was considered the payer of the premium in the context of the partnership's arrangement and the insurance policy.

The court reasoned that for a deduction to be allowable under section 82H (1) (a) (i), the premium must not only be paid by the taxpayer but also be payable by them by virtue of a contract of insurance. In this instance, the partnership effected four life insurance policies, including one on the life of Mrs. Crowe, for the benefit of all partners. The premiums were paid by the partnership's bank, debited to the partnership's account, and thus paid by the partnership. While the partnership's books debited each partner with the premium paid on their respective life policies, the court held that this internal arrangement among partners did not alter the fact that the premium was paid by the partnership to the insurer. Applying the principle from *Wilson v. Simpson*, the court concluded that the taxpayer had not paid the premium; it was paid by the partnership, and as between the partnership and the insurer, no ascertainable part of the payment could be attributed solely to the taxpayer. Consequently, the appeal was dismissed.