Transfer of partnership interest occurring on change in partnership arrangements
9A Transfer of partnership interest occurring on change in partnership arrangements
A transfer of a partnership interest is taken to occur when a change in partnership arrangements occurs.
A change in partnership arrangements occurs if—
a partner in an existing partnership retires so that a new partnership is formed (with or without the admission of new partners), or
a new partner is admitted to an existing partnership so that a new partnership is formed.
A new partnership is formed when a partner in an existing partnership retires, unless the partnership is wound up on that retirement (sometimes referred to as a general dissolution of the partnership).
A new partnership is formed whenever a new partner is admitted to an existing partnership.
For the purposes of this Act—
if a change in partnership arrangements occurs because of the retirement of a partner in an existing partnership, the retiring partner’s partnership interest is taken to be transferred to the partners in the new partnership (a retirement transfer), and
if a change in partnership arrangements occurs because of the admission of a new partner to an existing partnership, the new partner’s partnership interest is taken to be transferred to the partners in the new partnership (an admission transfer).
If a change in partnership arrangements results in both one or more retirement transfers and one or more admission transfers, duty is chargeable only on—
the retirement transfer or retirement transfers, if the dutiable value of the retirement transfer or retirement transfers exceeds the dutiable value of the admission transfer or admission transfers, or
the admission transfer or admission transfers, if the dutiable value of the admission transfer or admission transfers exceeds the dutiable value of the retirement transfer or retirement transfers.
This section does not affect liability for duty on a transfer of a partnership interest that occurs otherwise than because of a change in partnership arrangements.
Note.
For example, a transfer of a partnership interest from one partner to another partner in an existing partnership will also be dutiable under this Chapter.
To avoid doubt, a transfer of a partnership interest that is taken to occur under this section is a transfer of dutiable property and a reference in this Act to a transfer of dutiable property or a dutiable transaction includes a reference to such a transfer.
In this section, retirement of a partner includes retirement as a consequence of the death of a partner.
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