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Resource Capital Fund III LP v FCT: Some “what ifs”


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.

Author profile

Kenneth Lord CTA
Ken is a Partner in the Sydney office of Mallesons Stephen Jaques where he practices in income taxation law. Ken's practice focuses on the taxation aspects of banking and finance transactions. Ken has a particular emphasis on cross-border financing and investment, infrastructure project and real property financing and asset financing. - Current at 30 August 2011
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