Ordinary income and the arm’s length value of ‘uneconomic assets’ – Victoria Power Networks appeal

James Macky, Louise Lovering and Jenny Wong discuss a Full Federal Court decision which has, on appeal, partially overturned an earlier decision.

The Full Federal Court (Logan, Colvin and Thawley JJ) in Victoria Power Networks Pty Ltd v FCT [2020] FCAFC 169 has provided new guidance on the operation of section 21A of the Income Tax Assessment Act 1936 (ITAA 36), specifically as that provision applies to asset participants that operate in regulated sectors.Although the case relates to the regulated power industry, the question of ‘value’ for section 21A purposes can impact a number of sectors. For example, mining, renewables and propert...

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Authors: James Macky, Louise Lovering,

Published Date: 05 November 2020