Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 5 - Partnerships  

SECTION 92   INCOME AND DEDUCTIONS OF PARTNER  

92(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.

92(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.

92(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

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.

92(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.

(c) (Repealed by No 58 of 2006).

92(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.

92(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.