Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p8
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 8/18)
Character Range: 5446738–5449391

a copy of the determination.

385‑165  New partnership can elect to be treated as same entity as old partnership
 (1) Under Subdivision 385‑E, 385‑F or 385‑G a new partnership can elect to be treated as a continuation of an old partnership that would otherwise cease to exist if:
 (a) it immediately takes over the relevant *primary production business of the old partnership; and
 (b) partners, together entitled to at least 25% of the income of the new partnership, were also partners in the old partnership.
 (2) The new partnership must make this election before it lodges its *income tax return for the income year in which it takes over the *business.

385‑170  New partnership can elect to take advantage of election made by former owner of the business
 (1) If an entity (except a partnership):
 (a) has made an election under Subdivision 385‑E, 385‑F or 385‑G; and
 (b) transfers the relevant *primary production business to a partnership; and
 (c) is entitled to at least 25% of the income of that partnership;
the partnership may elect to apply the Subdivision under which the entity made the election to all future events as if it were that entity.
 (2) The partnership must make this election before it lodges its *income tax return for the income year in which the *business is transferred to it.

Division 392—Long‑term averaging of primary producers' tax liability

Table of Subdivisions
 Guide to Division 392
392‑A Is your income tax affected by averaging?
392‑B What kind of averaging adjustment must you make?
392‑C How big is your averaging adjustment?
392‑D Effect of permanent reduction of your basic taxable income

Guide to Division 392

392‑1  What this Division is about
      If you are a primary producer for 2 or more years in a row, this Division evens out your income tax liability from year to year. (It does so by reducing the effect that fluctuations in your taxable income have on the marginal rates of tax that apply to you from year to year.)

Table of sections
392‑5 Overview of averaging process

392‑5  Overview of averaging process

How averaging adjustments work
 (1) This Division reduces or increases your income tax liability to bring it closer to what it would have been if worked out using a special rate of income tax. That rate (the comparison rate) is based on the income tax that you would pay for the current year on the average of your taxable income for up to the last 5 income years.
Example: The graph shows how averaging taxable income reduces the effect of variations in taxable income (giving a fairly steady comparison rate from year to year).

Tax offset as averaging adjustment
 (2) You may