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Issues arising from the resource capital fund case


The Full Federal Court decision in Resource Capital Fund III LP v FCT in 2014 concerned a foreign limited partnership which made capital gains from selling a shareholding in an Australian mining company. The court held that the capital gains were properly taxable in Australia. This case is relevant to the taxation of cross-border investments through “hybrid entities”, and investments by non-residents into Australia, particularly in the resources and property sectors. It also has important implications for the interpretation of Australia’s tax treaties where Australia and another contracting state adopt different approaches to taxing a hybrid entity.

This article examines the issues arising from the RCF case. It also considers the potential implications of the events that have occurred in the aftermath of the case, including actions currently being undertaken as part of the OECD’s “base erosion and profit shifting” project, as well as the Australian Government’s legislative response to this case.

Author profiles

Abdol Mostafavi CTA
Photo of author, Abdol MOSTAFAVI Abdol Mostafavi is a Partner in the Business Tax Services group at Deloitte, and is based in Sydney. Abdol has over 21 years of experience in corporate and international tax, having advised a wide range of multinational clients in the financial services, real estate, transport, infrastructure services, and utilities sectors. - Current at 10 June 2019
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Charlotte Brierley
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