Kaszyckyj v Australian Taxation Office (No.2)

In *Kaszyckyj v Australian Taxation Office (No.2)*, the applicant, Mr. Kaszyckyj, sought judicial review of a decision by the Australian Taxation Office (ATO) to disallow his objection to an amended assessment of income tax for the 2013 income year. The dispute concerned the ATO's determination that certain payments received by Mr. Kaszyckyj from a company, K.P. Holdings Pty Ltd, constituted assessable income rather than loans.

The primary legal issue before the Court was whether the payments made by K.P. Holdings Pty Ltd to Mr. Kaszyckyj were loans, as contended by the applicant, or dividends, as determined by the ATO. This determination was crucial for establishing the correct tax treatment of these funds.

Judge Cameron applied the principles established in cases such as *Federal Commissioner of Taxation v. La Trobe* and *Commissioner of Taxation v. L.W. German & Son Pty Ltd*, which outline the factors to be considered when characterising payments between a company and a shareholder. The Court examined the intention of the parties at the time the payments were made, the existence of a genuine debtor-creditor relationship, the terms of any loan agreement, the provision of security, the repayment history, and the company's financial capacity to make loans. After considering the evidence, the Court found that there was no evidence to support the existence of a genuine loan agreement or a real intention to repay the funds, and therefore concluded that the payments were dividends and assessable income.