In distinguishing between an annuity payment and capital instalments of a purchase price, the courts generally: will be governed by the description given by the parties in their agreement. are influenced by the number of instalments to be paid by the taxpayer; o place importance on whether the parties' agreement identifies a "fixed gross sum"; o look at the parties' agreement to ensure they are acting at arm's length; Bryan is an Australian resident who had the following income and expenses for the year ended 30th June 2021: Income: $20,000 $80,000 Non Assessable Non Exempt income (fringe benefits) under ITAA36 s23L Salary from Big Bank Ltd (an Australian resident bank) Interest from Big Bank Ltd Rent from investment property at Manly NSW Unfranked dividend from shares in CorpCo Ltd $ 5,000 $15,000 $70,000 Deductions: Interest on loan used to acquire Manly property $10,000 Assuming that the interest on the loan used to acquire the Manly property is a valid deduction for Australian income tax purposes Bryan's taxable income for the year ended 30th June 2021 will be: o $170,000 (being the sum of all his income items other than the non-assessable non-exempt income under $23L) less $10,000 (being his interest deductions) = $160,000. o $190,000 (being the sum of all his income items) less $10,000 (being his interest deductions) = $180,000 $170,000 (being the sum of all his income items other than the non-assessable non-exempt income under s23AG). $170,000 (being the sum of all his income items other than the non-assessable non-exempt income exempt under s23L) less $10,000 (being his interest deductions) less his tax offset of $30,000 for the dividend calculated as $70,000 x 30/70. The end result of the calculation will be a taxable income of $130,000