Partnership interests
29 Partnership interests
The dutiable value of a partnership interest (DV) is to be determined in accordance with the following formula—
where—
A is the value of the partnership interest, or so much of the consideration for the dutiable transaction as relates to the partnership interest, whichever is the greater, and
X is the unencumbered value of all dutiable property of the partnership, and
Y is the unencumbered value of all assets of the partnership.
For the purposes of this section and despite subsection (1), the unencumbered value of dutiable property that is a business asset to which section 28 applies is the dutiable value of the business asset determined in accordance with section 28.
If the property of a partnership includes a land-related asset and an interest in the land-related asset is transferred as a result of the transfer of the partnership interest, the dutiable value of the partnership interest is to be reduced by the dutiable value of the interest in the land-related asset that is transferred, but only if ad valorem duty under this Chapter has been paid or is payable on the transfer of the interest in the land-related asset.
Note.
For example, 3 partners jointly hold land valued at $9 million and other non-dutiable property valued at $3 million. The partnership has liabilities of $6 million. One partner retires, and is paid $2 million for his or her partnership interest. The retiring partner transfers a one-third interest in the land to the remaining partners. Duty is payable at an ad valorem rate on the transfer of the one-third interest in the land. The transfer of the interest in land has a dutiable value of $3 million. Under this section, the partnership interest has a dutiable value of $1.5 million (DV = $2M × $9M/$12M). As the dutiable value of the interest in land transferred exceeds the dutiable value of the partnership interest transferred, the minimum duty would be payable on the transfer of the partnership interest.
The minimum duty chargeable in respect of a transfer of a partnership interest to which subsection (3) applies is $100.
For the purposes of subsection (3), each of the following items of dutiable property is a land-related asset—
land in New South Wales,
transferable floor space,
a land use entitlement,
an interest in an item of dutiable property referred to in paragraph (a), (b) or (c).
This Act’s bill:Explanatory memorandumSecond reading speech
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