Capital Gains Tax (CGT) Miscellaneous 2013

Resource Capital Fund III LP v FCT: Some what ifs

Source: The Tax Specialist Journal Article

Published Date: 1 Aug 2013


The decision of the Federal Court of Australia in Resource Capital Fund III LP v FCT, handed down on 26 April 2013, was about the taxation of a capital gain made by a foreign investor when it bought and then sold shares in an Australian mining company. Issues dealt with included the application of the US/Australia tax treaty to a limited partnership, and asset classification and valuation issues under the taxable Australian real property (TARP) rules.

This article considers the facts and issues in the case in detail, and examines its implications. In the author’s view, the decision is important in relation to the interaction of Australian domestic tax law and tax treaties. On the TARP issue, while announced changes to the TARP rules for intangible assets such as mining information will stop the decision’s potential to erode Australia’s CGT base in respect of mining companies, the decision is important in its approach to
valuation of assets under the TARP rules.

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Capital Gains Tax (CGT) Miscellaneous 2013

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