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INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 5 - Partnerships  

SECTION 92  INCOME AND DEDUCTIONS OF PARTNER  

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92(1)  

The assessable income of a partner in a partnership shall include:


(a) so much of the individual interest of the partner in the net income of the partnership of the year of income as is attributable to a period when the partner was a resident; and


(b) so much of the individual interest of the partner in the net income of the partnership of the year of income as is attributable to a period when the partner was not a resident and is also attributable to sources in Australia.

92(2)  

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Subject to section 830-45 of the Income Tax Assessment Act 1997, if a partnership loss is incurred by a partnership in a year of income, there shall be allowable as a deduction to a partner in the partnership:


(a) so much of the individual interest of the partner in the partnership loss as is attributable to a period when the partner was a resident; and


(b) so much of the individual interest of the partner in the partnership loss as is attributable to a period when the partner was not a resident and is also attributable to sources in Australia.

History

S 92(2) amended by No 101 of 2004, s 3 and Sch 10 item 1, by substituting "Subject to section 830-45 of the Income Tax Assessment Act 1997, if" for "Where", effective 30 June 2004. No 101 of 2004 contains the following application provision:

6 Application  
6 The amendments made by this Part have the same application to assessments of a taxpayer, and for working out the attributable income of a CFC, as does Division 830 of the Income Tax Assessment Act 1997.

Note: Division 830 of the Income Tax Assessment Act 1997 is inserted by Part 2 of this Schedule. Its application is given by Division 830 of the Income Tax (Transitional Provisions) Act 1997, which is inserted by Part 3 of this Schedule.

92(2AA)  

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However, if:


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


(b) the partnership is a VCLP, an ESVCLP, an AFOF or a VCMP during the year of income;
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the amount allowable under subsection (2), in respect of the year of income, as a deduction must not exceed the amount worked out as follows:

Method statement

Step 1. 

Work out the sum of the amounts that the partner has contributed (the partner's contribution) to the partnership.


Step 2. 

Subtract the sum of all the amounts (if any) of the partner's contribution that are repaid to the partner.


Step 3. 

Subtract the sum of all deductions allowed to the partner for losses of the partnership in previous years of income.


Step 4. 

Subtract the sum of the amounts of all the debt interests issued by the partner to the extent that they are secured by the partner's interest in the partnership.

Example:

A limited partner contributes $100,000 to a VCLP, having borrowed $80,000. Because the lender values the partner's interest in the partnership at $70,000, the partner also provides, as additional security, other assets valued at $10,000.

If none of the partner's contribution has been repaid and the partner has not been allowed deductions for partnership losses in previous years of income, the amount allowable to the partner for a partnership loss cannot exceed $30,000.

History

S 92(2AA) amended by No 78 of 2007, s 3 and Sch 8 item 88, by inserting ", an ESVCLP" after "VCLP" in para (b), effective 21 June 2007.

S 92(2AA) inserted by No 136 of 2002.

92(2A)  

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Subsection (2) does not apply to a partnership loss if the partner's interest in the partnership at the end of the year of income is:


(a) a segregated exempt asset (as defined in the Income Tax Assessment Act 1997) of a life assurance company; or


(b) a segregated current pension asset (as defined in the Income Tax Assessment Act 1997) of a complying superannuation fund.
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(c) (Repealed by No 58 of 2006).
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History

S 92(2A) amended by No 15 of 2007, s 3 and Sch 1 item 79, by substituting para (b), applicable to the 2007-2008 income year and later years. Para (b) formerly read:


(b) a segregated current pension asset (as defined in Part IX) of a complying superannuation fund (as defined in that Part).

S 92(2A) amended by No 58 of 2006, s 3 and Sch 7 item 175, by substituting para (b) for para (b) and (c), effective 30 June 2000. Para (b) and (c) formerly read:


(b) a segregated current pension asset (as defined in Part IX) of a complying superannuation fund (as defined in that Part); or


(c) a segregated exempt superannuation asset (as defined in Part IX) of a PST (as defined in that Part).

S 92(2A) amended by No 58 of 2006, s 3 and Sch 7 item 41, by substituting "year of income" for "income year", effective 22 June 2006.

S 92(2A) inserted by No 89 of 2000.

92(3)  

The exempt income of a partner in a partnership shall include:


(a) so much of the individual interest of the partner in the exempt income of the partnership of the year of income as is attributable to a period when the partner was a resident; and


(b) so much of the individual interest of the partner in the exempt income of the partnership of the year of income as is attributable to a period when the partner was not a resident and is also attributable to sources in Australia.

92(4)  

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The non-assessable non-exempt income of a partner in a partnership shall include:


(a) so much of the individual interest of the partner in the non-assessable non-exempt income of the partnership of the year of income as is attributable to a period when the partner was a resident; and


(b) so much of the individual interest of the partner in the non-assessable non-exempt income of the partnership of the year of income as is attributable to a period when the partner was not a resident and is also attributable to sources in Australia.

History

S 92(4) inserted by No 66 of 2003.

S 92 substituted by No 12 of 1979.


 



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