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CGT small business - partnership - active asset

Discussion in 'Accounting, Tax & Legal' started by mc, 25th Apr, 2011.

  1. mc

    mc New Member

    Joined:
    20th Jan, 2011
    Posts:
    1
    Location:
    Brisbane, QLD
    Hi all,

    I am just looking through the CGT small business concessions. I am unsure how an interest in a partnership satisfies the active asset test? Just hoping someone is able to explain how a partnership interest is an active asset?

    Thanks in advance.
     
  2. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    My interpretation ...

    The definition in s.995-1 refers to s.152-40 meaning.

    s.152-40(1) A CGT asset is an active asset if ... (a) you OWN the asset and it is used in a business carried on ... in partnership.

    s.108-5(2)(c) deems an interest in a partnership asset to be a CGT asset of the partner.

    It would be nice if the drafting used a more precise legal term than "own".

    However, CGT uses the concept of beneficial ownership and partial ownership interests.

    Cheers,

    Rob
     
    Last edited by a moderator: 26th Apr, 2011