The recent decision in Transurban City Link Ltd v C of T reinforces the fact that in order to determine whether a receipt or outgoing is of a revenue or capital nature you need to understand the true underlying character of the outgoing or receipt.
This paper explores the approach you need to take to ensure that you have correctly characterised a receipt or outgoing:
- can you assume that the label by which an item is referred to in a contract reflects its true character?
- interpreting contracts
- when are extraneous materials relevant?
- what do you do when the parties to the contract have a different understanding as to the character of outgoing or receipt?
- what do you do when third parties such as merchant bankers or the ATO have a different understanding as to the character of the outgoing or receipt?