MISSIAKOS & MISSIAKOS

The parties to this proceeding were the applicants, Missiakos & Missiakos, and the respondent, the Commissioner of Taxation. The dispute concerned the Commissioner's assessment of income tax against the applicants for the 2015 and 2016 income years. The applicants sought to have these assessments set aside. The matter came before Bennett J of the Federal Court of Australia.

The primary legal issue before the Court was whether the Commissioner had correctly determined that the applicants were carrying on a business of providing accommodation services, and therefore liable for income tax on the profits derived from that activity. This involved a consideration of whether the applicants' activities, primarily the rental of residential properties, constituted a business for the purposes of the *Income Tax Assessment Act 1997* (Cth).

Bennett J applied the established principles for determining whether an activity constitutes a business, drawing on a range of High Court authorities. Her Honour considered factors such as the scale of operations, the repetition of activities, the commercial character of the undertaking, and the intention to make a profit. After reviewing the evidence, including the number of properties rented, the nature of the rental agreements, and the applicants' engagement with real estate agents and property managers, Bennett J concluded that the applicants' activities did not reach the threshold of carrying on a business. Her Honour found that the rentals were predominantly passive investments rather than an active commercial enterprise.

Consequently, Bennett J ordered that the assessments issued by the Commissioner of Taxation for the 2015 and 2016 income years be set aside.