(b) in any other case—the amount that a person who is a qualified person in relation to the valuing of the share certifies that, on a true and fair view of the state of the company’s affairs, would, in respect of a sale at the end of the relevant valuation period between a willing but not anxious seller and a willing but not anxious buyer, be expected to be the consideration paid for the share, on the assumption, in a case where the class of shares in which that share is included was not, at the end of the relevant valuation period, listed for quotation in the official list of a stock exchange that, at that time, was a prescribed stock exchange, that the memorandum, or memorandum and articles, of the company, or other instrument constituting or defining the constitution of the company, satisfied, at that time, such of the requirements of a stock exchange that, at that time, was a prescribed stock exchange as it would have been necessary to satisfy to enable that class of shares to be listed for quotation in the official list of that stock exchange.
Division 5—Partnerships
90 Interpretation
In this Division:
exempt income, in relation to a partnership, means the exempt income of the partnership calculated as if the partnership were a taxpayer who was a resident.
net income, in relation to a partnership, means the assessable income of the partnership, calculated as if the partnership were a taxpayer who was a resident, less all allowable deductions except deductions allowable under section 290‑150 or Division 36 of the Income Tax Assessment Act 1997.
non‑assessable non‑exempt income, in relation to a partnership, means the non‑assessable non‑exempt income of the partnership calculated as if the partnership were a taxpayer who was a resident.
partnership loss, in relation to a partnership, means the excess (if any) of the allowable deductions, other than deductions allowable under section 290‑150 or Division 36 of the Income Tax Assessment Act 1997, over the assessable income of the partnership calculated as if the partnership were a taxpayer who was a resident.
91 Liability of partnerships
A partnership shall furnish a return of the income of the partnership, but shall not be liable to pay tax thereon.
92 Income and deductions of partner
(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.
(2) 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.
(2AA) 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;
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.
(2A) 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.
(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.
(4) 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.
92A Deductions in respect of outstanding subsection 92(2AA) amounts
(1) 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; and
(c) the amount allowable under subsection 92(2) as a deduction to the partner for partnership losses incurred by the partnership in the year of income is not reduced because of subsection 92(2AA); and
(d) the partner has an outstanding subsection 92(2AA) amount for the year of income;
there is allowable as a deduction to the partnership an amount worked out as follows:
Method statement
Step 1. Subtract the amount allowable under subsection 92(2) as a deduction to the partner for partnership losses incurred by the partnership in the year of income from the amount worked out using the method statement in subsection 92(2AA).
Step 2. If the amount worked out under step 1 is greater than or equal to the outstanding subsection 92(2AA) amount for the year of income, the amount of the deduction allowable under this section is the outstanding subsection 92(2AA) amount.
Step 3. If the amount worked out under step 1 is less than the outstanding subsection 92(2AA) amount for the year of income, the amount of the deduction allowable under this section is the amount worked out under step 1.
(2) The partner has an outstanding subsection 92(2AA) amount for a year of income if:
(a) an amount allowable under subsection 92(2) as a deduction to the partner for partnership losses incurred by the partnership in a previous year of income was reduced because of subsection 92(2AA); and
(b) the difference between:
(i) the sum of all reductions made under subsection 92(2AA) to amounts allowable under subsection 92(2) as deductions to the partner for partnership losses incurred by the partnership in previous years of income; and
(ii) the sum of all amounts allowable under this section, in respect of previous years of income, as deductions to the partner in relation to those reductions;
is greater than zero.
The amount of that difference is the partner’s outstanding subsection 92(2AA) amount for the year of income.
(3) To avoid doubt, a partner’s outstanding subsection 92(2AA) amount for a year of income cannot form part of a tax loss for the purposes of Division 36 or 160 of the Income Tax Assessment Act 1997.
94 Partner not having control and disposal of share in partnership income
(1) Subject to this section, where:
(a) a share in the net income of a partnership of a year of income is included in the assessable income of a partner in the partnership, not being:
(i) a company;
(ii) a person in the capacity of a trustee; or
(iii) a person who was under the age of 18 years on the last day of the year of income of the person that corresponds with the year of income of the partnership; and
(b) the partnership is so constituted or controlled, or its operations are so conducted, that the partner has not the real and effective control and disposal of that share or of a part of that share;
this section applies to that share or that part of that share, as the case may be.
(2) Subject to the succeeding provisions of this section, where:
(a) a partnership is so constituted or controlled, or its operations are so conducted, that a partner in the partnership, being a trustee of a trust estate, has not the real and effective control and disposal of his or her share in the net income of the partnership of a year of income or of a part of that share (which share or part of a share, as the case may be, is in this subsection referred to as uncontrolled partnership income); and
(b) in calculating in accordance with section 95 the net income of that trust estate or of any other trust estate, there is included in the assessable income of the trust estate any uncontrolled partnership income;
then:
(c) if:
(i) a beneficiary, not being a company or a person who was under the age of 18 years on the last day of the year of income of the person that corresponds with the year of income of the partnership, is presently entitled to the whole of the income of the trust estate otherwise than in the capacity of a trustee; or
(ii) there is no part of the net income of the trust estate that is included in the assessable income of a beneficiary in pursuance of section 97 or in respect of which the trustee is assessed and liable to pay tax in pursuance of section 98;
this section applies to the portion of the net income of the trust estate that was derived from uncontrolled partnership income;
(d) if a beneficiary, not being a company or a person who was under the age of 18 years on the last day of the year of income of the person that corresponds with the year of income of the partnership, is presently entitled to a share of the income of the trust estate otherwise than in the capacity of a trustee, this section applies to so much of that share of the net income of the trust estate as bears to that share the same proportion as the portion of the net income of the trust estate that was derived from uncontrolled partnership income bears to the net income of the trust estate; and
(e) if there is a part of the net income of the trust estate that is not included in the assessable income of a beneficiary in pursuance of section 97 and in respect of which the trustee is not assessed and is not liable to pay tax in pursuance of section 98, this section applies to so much of that part of the net income of the trust estate as bears to that part the same proportion as the portion of the net income of the trust estate that was derived from uncontrolled partnership income bears to the net income of the trust estate.
(5) For the purposes of this section:
(a) where:
(i) the assessable income of a trust estate includes the net income or a share of the net income of another trust estate; and
(ii) the assessable income of the other trust estate by reference to which that net income is calculated included income of a particular class (including an amount that is to be deemed by an application or applications of this paragraph to be income of a particular class);
the assessable income of the first‑mentioned trust estate shall be deemed to include income of that class of an amount equal to so much of the net income or share of the net income of the other trust estate that is included in the assessable income of the first‑mentioned trust estate as bears to that net income or share of that net income the same proportion as the portion of the net income of the other trust estate that was derived from income of that class bears to the net income of the other trust estate; and
(b) the portion of the net income of a trust estate that is derived from income of a particular class that is included in the assessable income of the trust estate is the amount remaining after deducting from the income of that class that is included in the assessable income of the trust estate:
(i) any prescribed deductions that relate exclusively to that income of that class;
(ii) so much of any other prescribed deductions (other than apportionable deductions) as, in the opinion of the Commissioner, may appropriately be related to that income of that class; and
(iii) the amount that bears to the prescribed deductions (being apportionable deductions) the same proportion as the amount that, but for this subparagraph, would be the portion of the net income of the trust estate that is derived from that income of that class bears to the sum of the net income of the trust estate and those last‑mentioned prescribed deductions.
(6) Where the assessable income of a trust estate includes, or, by virtue of paragraph (5)(a), is to be deemed to include, income of a particular class but the Commissioner is of the opinion that it would be unreasonable to treat each part or share of the net income of the trust estate that is included in the assessable income of a beneficiary, or on or in respect of which the trustee is assessed and liable to pay tax, as including a proportionate part of the portion of the net income of the trust estate that is derived from income of that class, the amount:
(a) that is the amount of a part or share of the net income of the trust estate to which this section applies by virtue of paragraph (2)(d) or (e); or
(b) that is, by virtue of paragraph (5)(a), the amount of the income of that class that is to be deemed to be included in the assessable income of another trust estate;
is, in lieu of the amount that, but for this subsection, would be the amount of that part or share of that net income or the amount of that income of that class, as the case may be, such amount as the Commissioner considers reasonable in the circumstances.
(8) Where the Commissioner is of the opinion that, by reason of special circumstances, it would be unreasonable that this section should apply to any income, this section does not apply to that income.
(8A) In forming an opinion for the purposes of subsection (8) as to whether it is unreasonable that this section should apply in relation to any of the net income of a trust estate, the Commissioner shall take into consideration the extent (if any) to which that net income represents income to which a beneficiary is presently entitled that is attributable to a period when the beneficiary was not a resident and is also attributable to sources out of Australia.
(9) Where the assessable income of a taxpayer, other than a taxpayer in the capacity of a trustee, includes income to which this section applies, the taxpayer shall be assessed and is liable to pay further tax, in accordance with subsection (10A) or (10B), upon the portion (in this section referred to as the eligible portion) of his or her taxable income that is derived from income to which this section applies.
(10) For the purposes of subsection (9), the portion of the taxable income of a taxpayer that is derived from income to which this section applies is the amount remaining after deducting from the income to which this section applies that is included in his or her assessable income:
(a) any deductions allowed or allowable in his or her assessment that relate exclusively to the income to which this section applies that is included in his or her assessable income;
(b) so much of any other deductions allowed or allowable in his or her assessment (other than apportionable deductions) as, in the opinion of the Commissioner, may appropriately be related to the income to which this section applies that is included in his or her assessable income; and
(c) the amount that bears to the apportionable deductions allowed or allowable in his or her assessment the same proportion as the amount that, but for this paragraph, would be the portion of his or her taxable income that is derived from income to which this section applies bears to the sum of his or her taxable income and those apportionable deductions.
(10A) Where Division 392 (Long‑term averaging of primary producers’ tax liability) of the Income Tax Assessment Act 1997 does not apply in relation to the income of a taxpayer of the year of income, the taxpayer is liable to pay further tax upon the eligible portion of his or her taxable income at the rate declared by the Parliament to be the rate of further tax payable in pursuance of subsection (9) in respect of the relevant part of the taxable income.