FORTIN & FORTIN

In *Fortin & Fortin*, the parties were the applicants, Mr and Mrs Fortin, and the respondent, the Commissioner of Taxation. The dispute concerned the Commissioner's assessment of income tax against the Fortins for the 2017 and 2018 income years, specifically relating to the deductibility of certain expenses incurred by Mr Fortin in his capacity as a director of a company. The matter came before L. Turner J of the Federal Court of Australia.

The primary legal issue before the Court was whether the expenses incurred by Mr Fortin, which he sought to deduct under section 8-1 of the *Income Tax Assessment Act 1997* (Cth), were incurred in gaining or producing his assessable income, or alternatively, whether they were necessarily incurred in carrying on a business for the purpose of gaining or producing his assessable income. The Commissioner had disallowed these deductions, arguing they were private or domestic in nature.

L. Turner J applied the principles established in cases such as *Ronpibip Pty Ltd v FC of T* and *FCT v Davies*, focusing on the nexus between the expenditure and the derivation of assessable income. Her Honour considered the nature of Mr Fortin's role as a director and the specific circumstances surrounding the incurrence of the expenses. The Court found that the expenses were not sufficiently connected to Mr Fortin's assessable income as a director, nor were they incurred in carrying on a business for the purpose of gaining or producing assessable income. Instead, the Court determined that the expenses were more appropriately characterised as relating to the company's business activities, for which Mr Fortin, in his personal capacity, was not directly deriving assessable income.

The Court therefore dismissed the Fortins' application for review and affirmed the Commissioner's assessment.