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Edited version of your written advice
Authorisation Number: 1051308152804
Date of advice: 20 November 2017
Ruling
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:
Question 1
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?
Answer
Yes.
Question 2
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?
Answer
No.
Question 3
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?
Answer
No.
Question 4
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?
Answer
Yes.
Question 5
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?
Answer
Yes.
Question 6
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?
Answer
No.
Question 7
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?
Answer
No.