Commissioner of Taxation v Resource Capital Fund IV LP [2019] FCAFC 51

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Resource Capital Fund IV LP [2019] FCAFC 51 Appeal from: Resource Capital Fund IV LP v Commissioner of Taxation [2018] FCA 41

File numbers: NSD 283 of 2018 NSD 285 of 2018

Judges: BESANKO, MIDDLETON, DAVIES, STEWARD AND THAWLEY JJ

Date of judgment: 2 April 2019

Catchwords: TAXATION – where provisions of the income tax law which refer to a company are read as also referring to a corporate limited partnership – where partners of a corporate limited partnership are jointly and severally liable to pay any amount that would be payable by the partnership – whether a corporate limited partnership is an entity which is liable to pay income tax – whether assessments issued to corporate limited partnerships should be treated as being assessments issued to all partners of each partnership CONSTITUTIONAL LAW – competency to object – where a corporate limited partnership is treated as a separate "taxable" entity – whether a corporate limited partnership is competent to object to an assessment – where liability is imposed on the individual partners without separate assessment – whether the imposition of joint and several liability on the individual partners would be an incontestable tax and unconstitutional TAXATION – ordinary income – source of income – where corporate limited partnerships made a gain from the sale of shares in a company – where value of the shares depended upon the value of a mine located in Australia – where disposal of shares was pursuant to a scheme of arrangement approved by the Federal Court of Australia – whether profits had an Australian source TAXATION – Double taxation agreement – residence of limited partnership – Division 855 of the Income Tax Assessment Act 1997 (Cth) – taxable Australian real property – mining, quarrying or prospecting right – whether limited partnerships could be residents of the United States – whether limited partnerships could rely on Taxation Determination TD 2011/25 for protection from Australian income tax – whether general purpose leases and a miscellaneous licence issued pursuant to the Mining Act 1978 (WA) were taxable Australian real property because they each constituted a "mining, quarrying or prospecting right" – whether general purpose leases were a lease of land