Darling v Commissioner of Taxation and Anor

The case of *Darling v Commissioner of Taxation and Anor* concerned a dispute between the taxpayer, Darling, and the Commissioner of Taxation. The matter came before the High Court of Australia, with judgment delivered by Hayne and Kiefel JJ.

The central legal issue before the High Court was whether the taxpayer had made a valid election under section 102-5 of the *Income Tax Assessment Act 1997* (Cth) to treat certain shares as having a market value of their cost base at the time of acquisition. This election, if valid, would have had the effect of deferring any capital gains tax liability until the shares were eventually disposed of. The Commissioner had disallowed the election, asserting it was not made in the prescribed manner.

The Court's reasoning focused on the interpretation of the relevant legislative provisions, particularly section 102-5 and the associated regulations governing the making of such elections. Their Honours considered the requirements for a valid election, including the timing and form of notification to the Commissioner. The legal principle applied was that statutory elections must be made in strict compliance with the legislative requirements to be effective. The Court found that the taxpayer had failed to satisfy these requirements, rendering the purported election invalid.

Consequently, the High Court dismissed the taxpayer's appeal, upholding the Commissioner's disallowance of the election.