DUTIES ACT 2001 - SECT 47
What is the value of a partnership acquisition—merger of 2 or more partnerships
DUTIES ACT 2001 - SECT 47
What is the value of a partnership acquisition—merger of 2 or more partnerships
47 What is the value of a partnership acquisition—merger of 2 or more
partnerships
(1) This section applies if— (a) a person (the
"partner" ) first makes a partnership acquisition (the
"new partnership acquisition" ) on the merger of 2 or more partnerships; and
(b) the person had a partnership interest (the
"old partnership interest" ) in 1 of the merging partnerships; and
(c) the
partner were to make a partnership acquisition for the
old partnership interest immediately before the merger, the value of the
partnership acquisition would include all or part of the unencumbered value of
dutiable property (the
"continuing property" ) that becomes dutiable property of the merged
partnership.
(2) The value of the new partnership acquisition must be reduced
by the lesser of— (a) the amount that would be the value of the
new partnership acquisition if the dutiable property of the merged partnership
comprised only the continuing property; or
(b) the amount that represents the
value of the partner’s partnership acquisition for the
old partnership interest mentioned in subsection (1) (c) immediately before
the merger worked out as if the dutiable property of the former partnership
comprised only the continuing property.
Example for working out
dutiable value under this section— X is a 30% partner in the XYZ
partnership that has dutiable property of $10m. The XYZ partnership merges
with another partnership, to form a new partnership (the merged partnership).
X has a 40% partnership interest in the merged partnership. The merged
partnership has dutiable property with an unencumbered value of $12m,
including $2m of the dutiable property of the XYZ partnership (the
continuing property).
The value of X’s new partnership acquisition is worked out as follows—
Example — Example— 1 The value of X’s interest in the merged
partnership is $4.8m, being 40% (X’s partnership interest in the merged
partnership) of $12m (the unencumbered value of the merged partnership’s
dutiable property).
2 The reduction under subsection (2) (a) is $800,000,
being 40% (X’s partnership interest in the merged partnership) of $2m (the
continuing property).
3 The reduction under subsection (2) (b) is $600,000,
being 30% (X’s partnership interest in the XYZ partnership) of $2m (the
continuing property).
The value of X’s partnership acquisition is $4.2m,
being $4.8m less $600,000 which is the lesser of the amounts worked out under
subsection (2) .