Resource Capital Fund III LP v Commissioner of Taxation [2013] FCA 363

FEDERAL COURT OF AUSTRALIA

Resource Capital Fund III LP v Commissioner of Taxation [2013] FCA 363 Citation: Resource Capital Fund III LP v Commissioner of Taxation [2013] FCA 363

Parties: RESOURCE CAPITAL FUND III LP v COMMISSIONER OF TAXATION

File number: NSD 638 of 2011

Judge: EDMONDS J

Date of judgment: 26 April 2013

Catchwords: DOUBLE TAXATION TREATIES – United States Double Taxation Convention – principles of and materials in aid of interpretation – taxation of gains derived from disposition of shares in a company owning real property (mining tenements) situated in Australia by a limited partnership formed outside both Australia and the United States but comprised of limited partners being predominantly United States residents – whether gain derived by limited partnership or limited partners for the purpose of the Convention – reconciliation with any inconsistency under Australia's domestic law – Div 5A of Pt III of Income Tax Assessment Act 1936 (Cth) INCOME TAX – Div 855 of Pt 4-5 of Income Tax Assessment Act 1997 (Cth) – whether capital gains derived by a foreign resident to be disregarded – whether "principal asset test" in s 855-30 passed – consideration of what is to be valued and compared as the criterion for passing the test – hypotheses and methodologies of valuation to be adopted

Legislation: International Tax Agreements Act 1953 (Cth) ss 4, 6, 6AA Schedule 2 – Convention between the Government of the Commonwealth of Australia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income Schedule 2A – United States Protocol: Protocol Amending the Convention between the Government of Australia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (27 September 2001): Arts 1, 3, 4, 7, 13 Former Schedule 2 - Convention between the Government of the Commonwealth of Australia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (14 May 1953): Art II Taxation Administration Act 1953 (Cth) s 14ZYA(3) Income Tax Assessment Act 1936 (Cth) Div 5A (ss 94A–94Y), s 167 Income Tax Assessment Act 1997 (Cth) ss 855-1 to 855-30, s 995-1 Evidence Act 1995 (Cth) s 79 Internal Revenue Code 1986 (US) §701, §7701 Vienna Convention on the Law of Treaties [1974] ATS 2