sec.47What is the value of a partnership acquisition—merger of 2 or more partnerships

### sec.47 What is the value of a partnership acquisition—merger of 2 or more partnerships This section applies if— a person (the partner ) first makes a partnership acquisition (the new partnership acquisition ) on the merger of 2 or more partnerships; and the person had a partnership interest (the old partnership interest ) in 1 of the merging partnerships; and 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. The value of the new partnership acquisition must be reduced by the lesser of— 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 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. 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 — 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). The reduction under subsection (2) (a) is $800,000, being 40% (X’s partnership interest in the merged partnership) of $2m (the continuing property). 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) . (sec.47-ssec.1) This section applies if— a person (the partner ) first makes a partnership acquisition (the new partnership acquisition ) on the merger of 2 or more partnerships; and the person had a partnership interest (the old partnership interest ) in 1 of the merging partnerships; and 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. (sec.47-ssec.2) The value of the new partnership acquisition must be reduced by the lesser of— 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 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. 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 — 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). The reduction under subsection (2) (a) is $800,000, being 40% (X’s partnership interest in the merged partnership) of $2m (the continuing property). 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) . - (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. - (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. - 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).