Trustees Executors and Agency Company Limited v Federal Commissioner of Taxation [1944] HCA 20

a

H.C. or A, Estate Duty (Cth.)—Assessment—Property assessable—" Beneficial interest . .

1944. which by . . . agreement . . . made by" deceased "passed or accrued Ww to, or devolved . . . upon," another person—Partner—Goodwill of MELBouRN®, partnership business—Option to surviving partners to acquire interest of deceased May 31. partner ata valuation, no allowance being made for goodwill—state Duly Assess- Seca, ment Act 1914-1940 (No. 22 of 1914—No. 12 of 1940), 8. 8 (3) (b), (4) (d), (e) Aug. 1. A business was carried on in partnership pursuant to an agreement which eae provided that on the death of any partner the surviving partners might at ae ee their option dissolve the partnership or might take over the share of the Williams JJ. deceased in the capital of the partnership, paying to his representatives a sum

Fe

Perera!

'Fprecutons Overraled PC. FEES 88 CLR 434

HIGH COURT

(HIGH COURT OF AUSTRALIA.]

THE TRUSTEES EXECUTORS AND AGENCY}, : COMPANY LIMITED. . . . ie Aro

AND

THE FEDERAL COMMISSIONER OF TAXA- TION .

} RESPONDENT. to be determined in manner specified, but that on the death of any partner no allowance should be made to his representatives in respect of the value of the goodwill of the business. On the death of one of the partners the survivors exercised the option to take over his share in the capital of the partnership and paid for it in the manner specified, no allowance being made for goodwill.

Held, by Rich, Starke and Williams JJ. (Latham C.J. and McTiernan oo dissenting), that, within the meaning of s. 8 (4) (e) of the Estate Duty Assess- ment Act 1914-1940, the deceased partner at the time of his death had a beneficial interest in the goodwill which on or after his death by virtue of the

partnership agreement passed or accrued to, or devolved on, the surviving partners.