Beneficial legislation

Eichmann v FCT [2020] FCAFC 155

Was a block of land next door to a builder and used by him for storage purposes an ‘active asset’ under CGT concessions?9  ‘Yes’ – the builder got relief on disposal of the land.  The court (at [38-40]) read the provisions beneficially ‘to promote the purpose of the concessions’ to ‘give the most complete remedy consistent with the actual language employed’10

That the land be used ‘in the course of carrying on a business’ did not mean it had to be used daily or in the normal course of that carrying on.  The beneficial approach adopted is rarely applied in tax situations.  It is more reflective of the ‘more general principle that all legislation is to be construed purposively’11.

This principle is from Episode 67 of interpretation NOW!


9 ss 152-35 & 152-40(1)(a) of ITAA97 (Small business relief).

10 Cliffs (1985) 7 FCR 271 (at 274-275), Khoury (1984) 165 CLR 622 (at 638).

11 NSWALC [2016] HCA 50 (at [92]), Tjungarrayi [2019] HCA 12 (at [44]).