Taxation Laws Amendment (Venture Capital) Act 2002 (136 of 2002)

Schedule 2   Flow-through treatment, and related matters

Income Tax Assessment Act 1936

16   At the end of section 94D


(2) However, a partnership that is a VCLP, an AFOF or a venture capital management partnership cannot be a corporate limited partnership.

Note 1: This subsection can apply without the partnership meeting the applicable registration requirements under the Venture Capital Act 2002. It must be registered under that Act in order to be a VCLP or an AFOF, but it is possible for it to remain registered while the requirements are not met.

Note 2: VCLPs, AFOFs and VCMPs are taxed as ordinary partnerships under Division 5.

Note 3: If the partnership’s registration as a VCLP or AFOF is unconditional, some partners’ share in capital gains and losses from CGT events relating to some investments may be disregarded: see Subdivision 118-F of the Income Tax Assessment Act 1997.

(3) A venture capital management partnership is a limited partnership that:

(a) is a general partner of either or both of the following:

(i) one or more VCLPs;

(ii) one or more AFOFs; and

(b) only carries on activities that are related to being such a general partner.

A limited partnership ceases to be a venture capital management partnership if it ceases to meet the requirements of paragraphs (a) and (b).

Note: In this Act, the term “venture capital management partnership” is usually abbreviated to “VCMP”.