Income Tax Act 2007 section 809AZF

Partnership shares

Section 809AZF establishes how a reduction in a partner's share of partnership profits or losses is treated as a transfer of partnership property for the purposes of the transfer of assets rules.

• When a partner's share of profits or losses is reduced, this is treated as a transfer of a right to relevant receipts
• The reduction is regarded as a consequence of a transfer of an underlying asset — namely, the partnership property
• This links the change in profit-sharing arrangements to the broader anti-avoidance rules on transfers of income-producing assets
• The provision ensures that partnership share reductions cannot be used to circumvent the transfer of assets rules in this chapter