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14 May 13 Decision Impact Statement - McGuire

The ATO has issued a Decision Impact Statement in relation to the Supreme Court of New South Wales decision in FCT v McGuire [2013] NSWSC 184.

The case concerned the application of s 60 of the Partnership Act 1892 (NSW) to taxation liabilities of a partnership imposed on limited partners.

The taxpayers were limited partners in a limited partnership. The partnership had an RBA deficit debt of $354,246.04, and this liability was imposed jointly and severally on the partners under s 444-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). The taxpayers contended that, under the terms of the partnership deed and s 60(1) of the Partnership Act 1892 (State Act), they were not liable for the amount of the debt.

The Court held that s 60(1) of the State Act did not apply to the liability in these proceedings. It found that s 60(1) applies to liabilities incurred by the general partner of the partnership as agent of the partnership. Section 444-30, on the other hand, imposes liabilities directly on the partners. The Decision Impact Statement states that this is consistent with the Commissioner's submissions to the Court.

 


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