Perpetual Executors & Trustees Association of Australia Ltd v Commissioner of Taxation (Cth) [1949] HCA 4

High Court of Australia Williams J. Latham C.J. Rich, Dixon, McTiernan and Webb JJ. Perpetual Executors & Trustees Association of Australia Ltd v Commissioner of Taxation (Cth) [1949] HCA 4

ORDER Appeal dismissed with costs. Williams J . delivered the following judgment:—

This is an appeal by the executors of the estate of Frederick Charles Henry Thomas who died on 28th January 1944, from the assessment by the respondent of his estate for the purposes of Federal estate duty under the provisions of the Estate Duty Assessment Act 1914-1942. Originally a number of items in the assessment were objected to but the respondent has twice amended the original assessment and has allowed all the objections except one.

The second amended assessment is dated 27th February 1948 and the appeal is now an appeal from that assessment. The only item still in dispute relates to the interest of the deceased in a partnership business carried on under the name of "Maples." There is a partnership agreement governing the rights of the parties dated 22nd December 1939 as amended by a further agreement dated 4th December 1940.

In the lifetime of the deceased there were seven partners, viz., the deceased, Robert Nathan, Louisa Jones, Lorna Hannan, Lionel Newton, Lauri Joseph Newton, Donald Lamond, and the deceased was survived by the other six partners. The partnership agreement included options to these surviving partners other than Lamond, to purchase a share of the deceased in the capital of the partnership.

In the events that have happened these options were firstly to Louisa Jones and Lorna Hannan, an option to purchase six and one quarter per cent of the interest of the deceased in the capital of the partnership, and secondly, to the other four partners, except Lamond, the option to purchase the residue of the interest of the deceased in this capital in proportion to their respective interests in the capital of the partnership.