If you acquire a partnership interest in a partnership that has dutiable property (directly or indirectly) in Queensland, you must pay transfer duty.
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You must pay transfer duty on certain transactions affecting partnerships holding (directly or indirectly) dutiable property in Queensland.
What is a partnership interest?
A partnership interest may be the:
- percentage of the value of a partner’s entitlement
- profit-sharing percentage that is acquired on becoming a partner or when the interest in the partnership increases
- greater of the percentage of the partnership capital that has been contributed or is obliged to be contributed
- percentage of the partnership losses that are to be borne.
Acquiring a partnership interest
A person can acquire a partnership interest in a number of ways, including:
- on formation of a partnership
- on a change in the membership of a partnership
- on merger of two or more partnerships
- where a person’s interest increases under terms of the partnership agreement or otherwise.
Working out the value of a partnership interest
The value of the partnership interest acquired is worked out by applying the percentage of the partner’s partnership interest acquired to the unencumbered value of the dutiable property held by the partnership and any indirect interest in dutiable property held by the relevant partnership.
When determining the value of the partner’s partnership interest acquired, the value of any dutiable property the partner contributed to the partnership on its formation is disregarded.
When determining the value of a partner’s partnership interest acquisition that is an increase in the partner’s partnership interest, the acquisition is taken to be the increase in the partner’s partnership interest.
See Chapter 2, Part 7 of the Duties Act 2001 for more information.