Tax Bites

More integrity measures – Assignments of Partnership income or capital

12th October 2018

The Government released exposure draft legislation on 12 October 2018 which contains small business CGT concession integrity measures in relation to the alienation of partnership income or capital.

In broad terms, the measures target CGT events that involve the creation, transfer, variation or cessation of a right or interest that would entitle an entity to either:

  1. An amount of the income or capital of a partnership; or
  2. An amount calculated by reference to a partner’s entitlement to an amount of income or capital of a partnership.

The measures propose to allow the small business CGT concessions to continue to apply to capital gains from those CGT events, but only where the right or interest is a membership interest of the entity in the partnership.

As such, capital gains arising from assignments of partnership income or capital where the right or interest is not a membership interest of the entity in the partnership would no longer be eligible for the small business CGT concessions.

The integrity measures are proposed to apply retrospectively from 8 May 2018 (being the date the measure was first raised in the 2018 Federal Budget).

 

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Tax Bites are general in nature and are not a substitute for specific advice. They are the opinion of Tax Advisory Specialists, and the ATO or the Courts may take a different view. They are not updated for changes in the law or the interpretation of the law since publication.

 

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