Treaty between Australia and United States – Australian Federal Court holds Cayman Islands partnership not US resident and cannot be assessed under the treaty

On 26 April 2013, the Australian Federal Court handed down its decision in Resource Capital Fund III LP v. Commissioner of Taxation [2013] FCA 363.

Background

The facts of the case are relatively simple – in 2006, Resource Capital Fund III LP (RCF), a limited partnership formed in the Cayman Islands, bought shares in St Barbara Mines Ltd (SBM), an Australian company that conducted a gold mining enterprise in Australia. In 2007, RCF sold some of its shares in SBM to unrelated part…