Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 51 - Exempt amounts  

SECTION 51-52   Income derived from eligible venture capital investments by ESVCLPs  

General

51-52(1)    
An entity's share of income derived from an *eligible venture capital investment is exempt from income tax if:

(a) the entity is a partner in a *limited partnership; and

(b) the partnership made the investment; and

(c) the investment meets all of the *additional investment requirements for ESVCLPs for the investment; and

(d) when the partnership made the investment, the partnership was an *early stage venture capital limited partnership that was *unconditionally registered; and

(e) when the income was derived, the partnership:

(i) owned the investment; and

(ii) was an early stage venture capital limited partnership that was unconditionally registered.

Partners in AFOFs

51-52(2)    
An entity's share of income derived from an *eligible venture capital investment is exempt from income tax if:

(a) the entity is a partner in an *AFOF; and

(b) the AFOF is a partner in a partnership that made the investment; and

(c) when the partnership made the investment, the partnership was an *early stage venture capital limited partnership that was *unconditionally registered; and

(d) the investment meets all of the *additional investment requirements for ESVCLPs for the investment; and

(e) when the income was derived, the partnership:

(i) owned the investment; and

(ii) was an early stage venture capital limited partnership that was unconditionally registered.

Residency requirements for general partners

51-52(3)    
However, if the entity is a *general partner in the partnership, this section does not apply to the entity unless the entity is:

(a) an Australian resident; or

(b) a resident of a foreign country in respect of which a double tax agreement (as defined in Part X of the Income Tax Assessment Act 1936 ) is in force that is an agreement of a kind referred to in subparagraph (b)(i), (ia), (ii), (iii), (iv) or (v) of that definition.

51-52(4)    
For the purposes of this section, the place of residence of a *general partner in a *limited partnership:

(a) that is a company or limited partnership; and

(b) that is not an Australian resident;

is the place in which the general partner has its central management and control.

Beneficiaries ' shares of capital gains made by unit trusts

51-52(5)    
For the purposes of this section, an entity's share of income derived from an *eligible venture capital investment that is an investment in a unit trust includes any present entitlement of the entity, as a beneficiary, to a share of an amount included in the assessable income of the unit trust under section 102-5 .

Carried interests

51-52(6)    
This section does not apply to an entity's share of income derived from an *eligible venture capital investment to the extent that the income is a payment of a *carried interest of a *general partner in an *ESVCLP or an *AFOF.