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Edited version of your written advice

Authorisation Number: 1051270599253

Date of advice: 18 August 2017


Subject: GST and reconstituted partnership


Is the reconstituted Partnership able to continue to use the same TFN, ABN and GST registration?



Relevant facts and circumstances

You are a Partnership that operates a business for mutual profit. The Partnership is registered for GST.

Prior to 1 July 2017, the Partnership consisted of X Partners. From 1 July 2017, another Partner was admitted into the Partnership.

All continuing Partners and the new Partner agree to the continuity and reconstitution of the Partnership.

The date of the reconstitution is 1 July 2017.

No Partners are retiring.

The Partnership has no formal agreement, but your conduct is consistent with continuity as nothing in the manner in which you conduct your business or interact as partners has changed.

There has been no break in the continuance of the enterprise from the day prior to the reconstitution of the partnership to the day after. That is:

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 195-1.

Reasons for decision

The meaning of 'partnership’ for the purposes of GST is defined in section 195-1 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act) by reference to the definition of 'partnership' in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997). Section 995-1 of the ITAA 1997 provides:

The first limb of paragraph (a) in the above definition refers to 'an association of persons (other than a company or limited partnership) carrying on a business as partners'. This reflects the general law definition of a partnership, which is 'the relation which subsists between persons carrying on a business in common with a view of profit'. The ATO refers to this type of partnership as a 'general law partnership'.

Goods and Services Tax Ruling GSTR 2003/13 Goods and Services Tax: general law partnerships ('GSTR 2003/13’) contains the ATO view regarding the treatment of general law partnerships for the purposes of GST, and more specifically, when a partnership is considered to have been 'reconstituted'.

Paragraph 127 of GSTR 2003/13 has been reproduced below:

The rationale for distinguishing a technical dissolution from a general dissolution is explained at paragraphs163 to164 of GSTR 2003/13:

Technical dissolution

Paragraph 148 of GSTR 2003/13 states the following:

Paragraph 149 of GSTR 2003/13 provides that whether or not there is a reconstituted partnership depends on the intention of the parties, and the terms and conditions of the partnership agreement.

In addition to the above, paragraph 150 of GSTR 2003/13 explains that a written partnership agreement may expressly provide for the continuation of the business in the event that there is a change to the membership of the partnership, which is often referred to as a 'continuity' or 'non-dissolution clause'. In the absence of a written agreement, such a clause may be implied by the conduct of the partners following the retirement or death of a partner, or introduction of a new partner.

According to the facts you provided to us:

You have also informed us that there is no written agreement in place in relation to incoming and outgoing partners that will allow for the continuity of the same partnership but the partners are in agreement for the new partner to join the partnership and for the partnership to continue as a reconstituted continuing partnership.

Practice Statement Law Administration PS LA 2011/8 ('PS LA 2011/8’) provides the following guidelines on whether a reconstituted partnership can use the ABN, TFN and GST registration of the original partnership:

As outlined in paragraph 107 of PS LA 2011/8, the following conditions must be satisfied if a reconstituted partnership wishes to continue to use its existing TFN, GST registration or ABN:

In addition, the following must be satisfied:

Furthermore, when lodging the partnership tax return, the following details must be supplied:

In this case we agree that the conditions above for a reconstituted partnership are satisfied and we are of the view that you can continue as a reconstituted partnership. Provided that the reconstituted partnership lodges its tax return including all the required details above, the partnership will be able to use its existing ABN, TFN and GST registration.

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