Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p35
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 35/40)
Character Range: 119455–122059

an additional 1/6 interest in the partnership assets. These additional interests are separate assets and post‑CGT assets.

 (4) If a new partner is admitted to a partnership:

 (a) the new partner *acquires a share (according to the partnership agreement, or partnership law if there is no agreement) of each partnership asset; and

 (b) the existing partners are treated as having *disposed of part of their interest in each partnership asset to the extent that the new partner has acquired it.

Example: (Indexation is ignored for the purpose of this example).

 Lyn and Barry form a partnership, each contributing $15,000 to its capital. The partnership buys land for $30,000.

 The land increases in value to $300,000.

 Andrew is admitted as an equal partner, paying Lyn and Barry $50,000 each to acquire a 1/3 share in the land. His cost base is $100,000.

 Lyn and Barry have each disposed of 1/3 of their interest in the land. Each has a cost base for that interest of $5,000, and capital proceeds of $50,000, leaving them with a capital gain of $45,000 each on Andrew's admission to the partnership.

 The land is sold for its market value.

 Andrew has no capital gain on the land.

 Lyn and Barry have disposed of their remaining 2/3 original interest in the land for capital proceeds of $100,000, leaving each of them with a capital gain of:

Subdivision 106‑B—Bankruptcy and liquidation

Table of sections

106‑30 Effect of bankruptcy
106‑35 Effect of liquidation

106‑30  Effect of bankruptcy

 (1) For the purposes of this Part and Part 3‑3, the vesting of the individual's *CGT assets in the trustee under the Bankruptcy Act 1966 or under a similar foreign law is ignored.

 (2) This Part and Part 3‑3 apply to an act done in relation to a *CGT asset of an individual in these circumstances as if it had been done by the individual:

 (a) as a result of the bankruptcy of the individual by the Official Trustee in Bankruptcy or a registered trustee, or the holder of a similar office under a *foreign law;

 (b) by a trustee under a deed of assignment or arrangement made under Part X of the Bankruptcy Act 1966, or under a similar instrument under a foreign law;

 (c) by a trustee as a result of an arrangement with creditors under that Act or a foreign law.

106‑35  Effect of liquidation

  This Part and Part 3‑3 apply to an act done by a liquidator of a company, or the holder of a similar office under a *foreign law, as if the act had been done instead by the company.

Example: Ben, a liquidator of a company, sells a CGT asset of the company. Any capital