Spriggs v Federal Commissioner of Taxation [2007]: A Case Study on Deductible Expenses under Section 8-1 of ITAA 1997

Running head: TAXATION LAW
Taxation Law
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1TAXATION LAW
Table of Contents
Spriggs v Federal Commissioner of Taxation [2007]................................................................2
Introduction:...........................................................................................................................2
Issues:.....................................................................................................................................2
Rule:.......................................................................................................................................2
Application:............................................................................................................................4
Conclusion:............................................................................................................................5
References:.................................................................................................................................6

2TAXATION LAW
Spriggs v Federal Commissioner of Taxation [2007]
Introduction:
The applicants are here AFL players employed to play the full time football under the
playing contract. The taxpayers claimed deductions for the management fees of $2,310 under
the “section 8-1 of the ITAA 1997”. The court allowed deduction because the activities
carried out pursuant to contract of employment does not amounted to business.
Issues:
The main issue is whether the fee of $2,310 paid to Connors Sports Management Pty Ltd
by Spriggs during the income year ended June 30, 2005 will be considered as allowable
deduction under “section 8-1 of the ITAA 1997” (Woellner 2013). To be precise, was the
management fee:
a. Occurred by Spriggs in generating assessable income during the income year 2005 is
under “section 8-1(a) of the ITAA 1997”?
b. Were the expenses occurred by Spriggs in conducting business with the objective of
deriving taxable income for the year 2005 under “section 8-1(a) of the ITAA 1997”?
c. Was the outcome occurred by Spriggs at the point too soon was relevant and
incidental to the revenue generating acts of Spriggs?
d. Whether the loss or outgoing are of capital in nature or capital under the “section 8-
2(a) of the ITAA 1997”?
Rule:
As per the “section 8 of the ITAA 1997” it is relevant for the taxpayer to obtain
deduction from the taxable income for any loss or outgoings up to the extent that is occurred
in producing or gaining the taxable income (Morgan, Mortimer and Pinto 2013). The act
provides that the expense must be necessarily occurred in performing the business activities