Income tax: capital gains: if a CGT asset is owned by partners in partnership, how do the replacement asset tests in Subdivision 124-B of the Income Tax Assessment Act 1997 apply?

The replacement asset tests apply at the partner level and not at the level of the partnership.

An interest in an asset of a partnership is itself a CGT asset as defined in section 108-5 of the Income Tax Assessment Act 1997: see paragraph 108-5(2)(c). Each individual partner's interest in each asset of the partnership is the relevant CGT asset for a roll-over under Subdivision 124-B. A partner's interest in each partnership asset, for instance, may be compulsorily acquired by an Australian government agency in terms of paragraph 124-70(1)(a).

Each individual partner needs to satisfy the tests for their particular interest in each partnership CGT asset to qualify for a roll-over under Subdivision 124-B.