Episode 34

Resource Capital is a decision of Pagone J, now on appeal, about the tax treatment of limited partnership profits1.  One issue was whether the judge was bound by a superior court decision that the partnership in question was a legal entity2.  Pagone J said (at [6]) that, while he was bound by precedent, there was no obligation to follow a case where a proposition of law had only been assumed rather than decided3.  This is a principle well-known in the law.  The difficulties come, as they often do, when disentangling its operation in practice.  Because the appeal court had assumed the entity point, Pagone J was free to decide it for himself.  iTip – always check that the proposition you are investigating has not simply been assumed.

Emma Robins – Tax Counsel Network

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Writers – Emma Robins, Gordon Brysland, Suna Rizalar & Ellis Rigby. Thanks to Andrew Maslaris (Treasury) & Robert Olding.

1 Resource Capital Fund IV LP v FCT [2018] FCA 41.

2 Resource Capital [2014] FCAFC 37 (at [8]).

3 Hetherington [1990] Ch 1 (at 9-10), Eddy [2005] HCA 64 (at [13]) quoted.