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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME    View history reference

Division 51 - Exempt amounts    View history reference

SECTION 51-52  Income derived from eligible venture capital investments by ESVCLPs  

 View history reference

General

51-52(1)  

An entity's share of income derived from an *eligible venture capital investment is exempt from income tax if:


(a) the entity is a partner in a *limited partnership; and


(b) the partnership made the investment; and


(c) the investment meets all of the *additional investment requirements for ESVCLPs for the investment; and


(d) when the partnership made the investment, the partnership was an *early stage venture capital limited partnership that was *unconditionally registered; and


(e) when the income was derived, the partnership:


(i) owned the investment; and

(ii) was an early stage venture capital limited partnership that was unconditionally registered.

Partners in AFOFs

51-52(2)  

An entity's share of income derived from an *eligible venture capital investment is exempt from income tax if:


(a) the entity is a partner in an *AFOF; and


(b) the AFOF is a partner in a partnership that made the investment; and


(c) when the partnership made the investment, the partnership was an *early stage venture capital limited partnership that was *unconditionally registered; and


(d) the investment meets all of the *additional investment requirements for ESVCLPs for the investment; and


(e) when the income was derived, the partnership:


(i) owned the investment; and

(ii) was an early stage venture capital limited partnership that was unconditionally registered.

Residency requirements for general partners

51-52(3)  

However, if the entity is a *general partner in the partnership, this section does not apply to the entity unless the entity is:


(a) an Australian resident; or


(b) a resident of a foreign country in respect of which a double tax agreement (as defined in Part X of the Income Tax Assessment Act 1936) is in force that is an agreement of a kind referred to in subparagraph (b)(i), (ia), (ii), (iii), (iv) or (v) of that definition.

51-52(4)  

For the purposes of this section, the place of residence of a *general partner in a *limited partnership:


(a) that is a company or limited partnership; and


(b) that is not an Australian resident;

is the place in which the general partner has its central management and control.

Beneficiaries' shares of capital gains made by unit trusts

51-52(5)  

For the purposes of this section, an entity's share of income derived from an *eligible venture capital investment that is an investment in a unit trust includes any present entitlement of the entity, as a beneficiary, to a share of an amount included in the assessable income of the unit trust under section 102-5.

Carried interests

51-52(6)  

This section does not apply to an entity's share of income derived from an *eligible venture capital investment to the extent that the income is a payment of a *carried interest of a *general partner in an *ESVCLP or an *AFOF.


 



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