Private ruling: Capital gains tax consequences of an assignment of partnership interest
Date of advice: 20 November 2017
Published: April 2018

Ruling: Q1: Will Capital Gains Tax (‘CGT’) event E1 under section 104-55 of the Income Tax Assessment Act 1997 (‘ITAA 1997’) happen when the Partner assigns a portion of their beneficial interest in the Partnership to a trust by way of declaration of trust? | A1: Yes. | Q2: Will CGT event E2 under section 104-60 of the ITAA 1997 happen when the Partner assigns a portion of their beneficial interest in the Partnership to a trust by way of declaration of trust? | A2: No. | Q3: Will CGT event A1 under section 104-10 of the ITAA 1997 happen when the Partner assigns a portion of their beneficial interest in the Partnership to a trust by way of declaration of trust? | A3: No. | Q4: Will the capital proceeds for the Partner’s disposal of the Partnership interest to a trust be the deemed market value consideration under section 116-30(1) of the ITAA 1997 for the CGT event? | A4: Yes. | Q5: In calculating any CGT payable by the Partner on the disposal of the Partnership interest to a trust, is an interest in the Partnership an active asset pursuant to section 152-40 of the ITAA 1997? | A5: Yes. | Q6: In calculating any CGT payable by the Partner on the disposal of the Partnership interest to a trust, is the Service Trust an entity connected with the Partner as defined in section 328-125 of the ITAA 1997 for the purposes of the maximum net asset value test in section 152-15 of the ITAA 1997? | A6: No. | Q7: In calculating any CGT payable by the Partner on the disposal of the Partnership interest to a trust, are the other Partners in the Partnership affiliates of the Partner pursuant to section 328-130 of the ITAA 1997 for the purposes of the maximum net asset value test in section 152-15 of the ITAA 1997? | A7: No.




Subject: Capital gains tax consequences of an assignment of partnership interest: In order to protect the privacy and commercial in-confidence components of this private binding ruling the following summary is provided. | The commissioner has ruled on the following: