WICKHAM & WICKHAM

The parties to this proceeding were the applicants, Wickham & Wickham, and the respondent, the Commissioner of Taxation. The dispute concerned the deductibility of certain expenses incurred by the applicants, which the Commissioner had disallowed. The matter came before Henderson J of the Supreme Court of Western Australia.

The primary legal issue before the Court was whether the expenses incurred by the applicants, which were described as "management fees" and "consulting fees," were properly deductible under section 8-1 of the *Income Tax Assessment Act 1997* (Cth). This required the Court to determine if these expenses were incurred in gaining or producing assessable income, or if they were necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.

Henderson J applied the well-established principles for determining deductibility under section 8-1. His Honour considered the nature of the expenditure and its connection to the applicants' business activities. The Court found that the management and consulting fees were indeed incurred in the course of carrying on the applicants' business and were therefore deductible. The Commissioner's disallowance was set aside.