Peter Madden discusses a Full Federal Court decision, a comprehensive victory for the ATO, which covered a number of very important areas of taxation.
The much anticipated decision in the Commissioner of Taxation v Resource Capital Fund IV LP (RCF IV) was handed down on Tuesday 2 April 2019. The full bench of the Federal Court comprising of five judges unanimously found for the Commissioner overturning the single Federal Court finding of Justice Pagone. The decision was a comprehensive victory for the Australian Taxation Office (ATO) covering a number of very important areas of taxation, including:
The Full Federal Court had to contend with interpreting the deeming provisions of Division 5A of the Income Tax Assessment Act (“ITAA 36”) which modify the provisions of the ITAAs 36 &97 to treat CLPs as companies for most purposes of the ITAAs. As the decision in RCF IV illustrates, these deeming provisions are not perfect and a number of anomalies have been identified in trying to apply these provisions in practice.
To read more of this article, including the Full Federal Court's findings on the seven identified issues, please log on to KPMG Tax Now.
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