| 6/1/2009 |
Bil-Malti
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| Board of Special Commissioners - Cases |
| Case No. 15/60 |
Decided: 26 October, 1960 |
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Residence and personal deductions; housekeeper's allowance; a shareholder was not responsible for company's debts beyond his holding - articles 10 (now 14) and 22 (now repealed), Income Tax Act
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Appellant disagreed with the Commissioner's decision that (1) he was a non-resident for tax purposes and, therefore, not eligible to personal allowances; (2) he was not granted an allowance in respect of the housekeeper who took care of the minor children he had left behind in Malta when residing overseas; and (3) no deduction had been made to cover the losses he had incurred as a shareholder of a company.
The Board agreed with the Commissioner that one could not classify a taxpayer as a resident when the latter was away from the Island with most of his family for over five years except for very brief periods. Neither could consideration be given to appellant's claim that he had emigrated temporarily until he would have made enough money to settle his local debts: residence and domicile are two distinct issues.
Regarding the housekeeper's allowance the Board noted that this allowance was conditional on the taxpayer being unmarried or a widow, which was not the case.
The Board also agreed with the Commissioner that the rights of a shareholder are limited to his share of the profits and the net asset value on liquidation. In the latter case a loss would be capital in nature and, therefore, not deductible. While the company is in existence a shareholder's responsibility is limited to his holding, independent of the size of the company's debts. Appellant could not, therefore, be considered to have suffered any loss.
An appeal was entered before the Court from this decision. The appeal was subsequently ceded.
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