INCOME TAX ASSESSMENT ACT 1997 - SECT 104.255 Carried interests: CGT event K9

INCOME TAX ASSESSMENT ACT 1997 - SECT 104.255

  (1)   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.

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

  (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

  (4)   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.

  (5)   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.

  (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

  (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.

Meaning of payment of carried interest

  (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.