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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 104 - CGT events  

Subdivision 104-K - Other CGT events  

SECTION 104-255  Carried interests: CGT event K9  

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104-255(1)  

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CGT event K9 happens if you become entitled to receive a *payment of a *carried interest of a *general partner in a *VCLP, an *ESVCLP or an *AFOF or a *limited partner in a *VCMP.

104-255(2)  

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The time of the event is the time you become entitled to receive the *payment.

104-255(3)  

You make a capital gain equal to the *capital proceeds from the *CGT event.

Note:

You cannot make a capital loss.

Meaning of carried interest

104-255(4)  

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The carried interest of a *general partner in a *VCLP, an *ESVCLP or an *AFOF is the partner ' s entitlement to a distribution from the VCLP, ESVCLP or AFOF, to the extent that the distribution is contingent upon the attainment of profits for the *limited partners in the VCLP, ESVCLP or AFOF.

[ CCH Note: Act No 78 of 2007 , s 3 and Sch 8 item 111 inserts " , ESVCLP " after " VCLP " , in s 104-255(4), however there are two instances of " VCLP " in s 104-255(4). CCH has inserted " , ESVCLP " in both instances as it is presumed that this was the intention.]

104-255(5)  

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The carried interest of a *limited partner in a *VCMP is the partner ' s entitlement to a distribution from the VCMP, to the extent that the distribution is contingent upon the attainment of profits for the *limited partners in the VCLP, ESVCLP or AFOF in which the VCMP is a *general partner.

104-255(6)  

The carried interest does not include:


(a) any part of the partner ' s entitlement to that distribution that is attributable to a fee (by whatever name called) for the management of the *VCLP, *ESVCLP, *AFOF or *VCMP; or
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(b) any part of the partner ' s entitlement to that distribution that is attributable to the partner ' s *equity interest in the VCLP, ESVCLP, AFOF or VCMP.
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Meaning of payment of carried interest

104-255(7)  

Payment , of a *carried interest, includes:


(a) a payment that is attributable to the carried interest; or


(b) the giving of property in satisfaction of the carried interest: see section 103-5 ; or


(c) the giving of property in satisfaction of an entitlement that is attributable to the carried interest: see section 103-5 .


 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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