From johnjeffreystax.com.au: In the case of Merchant v Commissioner of Taxation, the Full Federal Court determined that Mr. Merchant’s actions, which involved crystallising a capital loss to offset a significant capital gain, constituted tax avoidance under Part IVA due to the sale of the BBG shares to a related party.

Dissenting Justice Logan criticised this application of Part IVA, arguing it disregarded the legitimate commercial context of the transactions involved.

The case serves as a reminder for taxpayers that actions appearing as standard tax planning, especially involving related entities, may still draw scrutiny from the ATO.