He said $30 million over 11 years were gifts from a loving sister. His own paperwork said otherwise, at every turn.
Your client receives $30 million over 11 years from a family business in Vanuatu. He says they are gifts from a loving sister.
His visa application says “owner of ABM” [75]. His citizenship form says “BUSINESS OWNER” [79]. His credit card application says $500,000 salary [80]. The business website calls him “founder” and “Managing Director” [86].
The primary judge believed none of that mattered. The Full Court disagreed. Commissioner of Taxation v Cheung [2026] FCAFC 75.
The paper trail
Mr Cheung worked in the ABM business from 1974. He says he retired in 2000. Between 2005 and 2015, 101 deposits totalling over $30 million flowed from ABM accounts to him.
He told the ATO in 2015 he “gets share of profit” [65]. In 2016 he told the ATO he had “sold” his interest in ABM to his sister [70]. Mrs Leong denied he was a bank account signatory. He was [85]. She denied knowledge of a trust holding three properties he had transferred. Then could not remember. Then accepted it [101]. She denied he owned shares in a company she said she directed. He owned it [102].
In 2022, half the shares in the company holding the ABM business were owned by a trust for Mr Cheung’s family. Mrs Leong could not explain why [116].
Inherently improbable
The Full Court held the primary judge’s fact-finding miscarried. His Honour assessed credibility on demeanour without confronting the documentary evidence [46].
The payments were monthly, increasing from around $50,000 in 2005 to $246,000 by 2007 [156]. Periodicity is a “hallmark” of income: Myer Emporium [159]. The taxpayer’s successor as general manager was paid $1,500 per month [94]. Mr Cheung received approximately $30 million in “gifts”.
He claimed to invest for the “wider family”. Every investment flowed through entities he controlled. No wider family member gave evidence of receiving anything [137]. His 1999 visa declared personal wealth of $50 million in Australian investments [145].
The proposition that more than $30 million in regular payments from a business the taxpayer worked his entire career were unconnected gifts was “inherently improbable” [165].
The practitioner lesson
Demeanour cannot carry the day where documents contradict testimony at every turn. A compelling witness is not a substitute for a coherent evidentiary case [168-169].
Your client’s own representations to third parties - visa applications, credit card forms, business websites - are potent evidence. They were made when no one was thinking about litigation.
Regularity kills the gift narrative. Monthly payments increasing over a decade look like income. The statute does not care about cultural context when the taxpayer cannot discharge the onus.
The appeal was allowed. The assessments stand.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.