Blank v Commissioner of Taxation

HIGH COURT OF AUSTRALIAFRENCH CJ,KIEFEL, GAGELER, KEANE AND GORDON JJVAUGHAN RUDD BLANK  APPELLANTANDCOMMISSIONER OF TAXATION  RESPONDENTBlank v Commissioner of Taxation[2016] HCA 429 November 2016S144/2016ORDER1.Appeal dismissed with costs.2.Application for special leave to cross-appeal dismissed with costs.On appeal from the Federal Court of AustraliaRepresentationM Richmond SC with T O Prince for the appellant (instructed by Clayton Utz Lawyers)J T Gleeson SC, Solicitor-General of the Commonwealth and J O Hmelnitsky SC with M J O'Meara for the respondent (instructed by Minter Ellison Lawyers)Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.CATCHWORDSBlank v Commissioner of TaxationIncome tax – Assessable income – Where taxpayer participated in employee incentive profit participation agreement – Taxpayer granted claim to deferred compensation calculated on basis of company profit – Amount payable under agreement to taxpayer on termination of employment and execution of declaration of assignment and release – Whether amount income according to ordinary concepts or capital gain.Words and phrases – "deferred compensation", "Genussscheine", "incentive profit participation agreement", "ordinary income", "pecuniary account".Income Tax Assessment Act 1936 (Cth), s 26(e).Income Tax Assessment Act 1997 (Cth), s 6-5(1), (4).Swiss Code of Obligations, Art 657.FRENCH CJ, KIEFEL, GAGELER, KEANE AND GORDON JJ.   IntroductionThe appellant, Mr Blank, was employed by Glencore Australia Pty Ltd, a wholly owned subsidiary of Glencore International AG ("GI").  Glencore Australia provided services including the services of Mr Blank to Glencore AG, also a wholly owned subsidiary of GI.  An incentive profit participation agreement between Mr ...