Evans v Federal Commissioner of Taxation (1989) 89 ATC 4540

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  • The Commissioner alleged the taxpayer was a professional gambler for the income tax years of 1977 to 1981 and assessed his winning on an asset betterment basis.
  • Evans received amended assessments pursuant to s 167 of the Income Tax Assessment Act (Cth) for 1977 to 1979.
  • The 1977 assessment was six years after the tax became payable.
  • In Evans’ income tax returns for the 1977 and 1978 tax years he declared his interest in horse racing and greyhound racing as a hobby and an estimate of his winnings.
  • In October 1978, Evans entered into a partnership agreement with a friend to conduct a wallpaper shop. Evans provided the capital and his friend managed the shop. In December 1979 he purchased a hotel and was actively involved in running the business. Throughout this period he owned a number of racehorses. None of them were successful and were sold at a loss.


  • Was Evans a professional gambler?


  • A business should have elements of repetition, permanence, continuity and system.
  • The test of whether a business of gambling, or for that matter any business, is carried on will be largely objective, determined by reference to the nature and extent of the activities involved.
  • For a punter to be a professional gambler, his betting activities must be conducted as as to get the most favourable odds obtainable.
  • Volume and size of punting are not determinative.
  • Evans was not a professional gambler because it lacked the element of system or organisation which is characteristic of a business. There was no pre-formulated plan. Did not maintain any office or employ staff

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