1 Will the proposed transfer of the property interests owned by the Company to newly established discretionary family trusts qualify for roll-over relief under Subdivision 328-G of the Income Tax Assessment Act 1997 (ITAA 1997)?
1 Yes. This ruling applies for the following period: Income year ending 30 June 2025
The Stud The Stud is a stud located in Australia. The Stud predominantly generates its income from produce and livestock sales. It also generates not an insignificant amount of income from its stud. The Stud was founded in 19XX by Person A. In 20XX, the two of the children of Person A and Person B, Person C and Person D, took over as new principals. Since this time Person A and Person B have continued to act as consultants and mentors in respect of the business operations of the Stud. The Stud business is conducted under a partnership (Partnership) established in 20XX. The partners of the Partnership are Person D (XX%), Person C (XX%), Person B (X%) and Company B (X%). The secretary of Company B is Person C and the directors are Person C and Person D. The share structure of Company B is XX ordinary shares, equally owned by Company C as trustee for the C Trust and Company D as trustee for the D Trust. Trust C has made a family trust election (FTE) with Person C as the 'test individual' 1 . Trust D has made a FTE with Person D as the test individual.
The Partnership had an aggregated turnover of less than $10 million in the year ended 30 June 2024 and is a small business entity (SBE) under section 328-110 of the ITAA 1997 for 2025 income year. The Company The Company is an Australian proprietary company registered in XXX 19XX. The Company: • does not carry on a business or undertake business activity; • is not an 'exempt entity' as defined in section 995-1 of the ITAA 1997; and • is not a 'complying superannuation entity' as defined in section 995-1 of the ITAA 1997. The secretary of the Company is Person B and the directors are Person A and Person B. The share structure of the Company is XX A class shares and XXXX B class shares. The holders of these shares are: • Person A (XX A class and XXXX B class); and • Company E as trustee for the E Trust 2 (XX A class and XX B class). The secretary of Company E is Person A and the directors are Person A and Person B. The share structure of Company E is XXX ordinary shares, equally owned by Person A and Person B. The beneficiaries of the E Trust are:
• Person A, Person B, Person C and Person D (as primary beneficiaries); • brothers, sisters, spouses, children and grandchildren of the primary beneficiaries, and the spouses, children and grandchildren of such brothers, sisters, spouses, children and grandchildren; and • the trustee any eligible trust (i.e. a trust in which any beneficiary of the E Trust has an interest) and any eligible corporation (i.e. a company at least one share in the capital of which is held by any beneficiary of the E Trust). The E Trust has made a FTE which commenced on X XXX 20XX with Person A nominated as the test individual. In addition to the shares it holds in the Company, the E Trust currently holds Person A and Person B's share portfolio (personal passive investment). The Company owns XX property interests, each of which are used by the Partnership to carry on its business: The Company does not charge rent to the Partnership for its use of the property interests. Proposed Restructure
The property interests owned by the Company will be transferred to X newly established discretionary family trusts (Family Trusts) in the 20XX income year (Proposed Restructure). The property interests will be separated between the Family Trusts in accordance with specific farm aggregations which will be determined by factors such as geographical proximity, operational synergies or management divisions. The Partnership will continue to operate the business on the property interests, and intends to do so indefinitely. The Family Trusts The Trustee of each of the Family Trusts will be an Australian incorporated company owned by Person A, Person B, Person C and Person D. Each Family Trust will neither be an 'exempt entity', nor a 'complying superannuation entity' as defined in section 995-1 of the ITAA 1997. Each Family Trust will make a FTE nominating Person A as the test individual. The beneficiaries of each Family Trust will be limited to Person A, Person B, Person C and Person D, Person E 3 and the spouses and children of Person C, Person D and Person E. Purpose of Proposed Restructure
The Company has identified a number of key commercial drivers for undertaking the Proposed Restructure. These are: • Asset protection and risk management: the current structure does not provide optimal asset protection for the Company's property interests. The establishment of the separate discretionary family trusts for each land aggregation will provide enhanced protection through risk isolation, ensuring that each distinct property holding is independently protected from risks that may arise in relation to other holdings (for e.g. 'premises liability'). • Separation of business and personal assets: it is not considered optimal from a commercial perspective for the E Trust to hold both Person A and Person B's personal passive investments and business assets (i.e. its indirect holdings in the property interests via its ownership of Company shares). The Proposed Restructure will achieve clear segregation between business property holdings and personal passive investments, allowing for more focused asset management and clearer risk separation.
• Operational efficiency: the current structure is inefficient as all land-related decisions and agreements must go through the Company, creating an unnecessary layer of complexity. The Proposed Restructure will allow for: independent and streamlined decision-making for each property holding; simplified management of distinct property operations; enhanced flexibility for future commercial decisions regarding individual properties; and more efficient financing arrangements through clear asset segregation (i.e. loans can be secured against specific properties without encumbering the entire business). • Long-term succession planning: the Proposed Restructure will simplify future succession planning by eliminating the need for transfers of company shares. This can help prevent potential disputes and ensure smoother transitions of land assets between generations. Assumptions Both the Company and the Family Trusts will elect to choose the roll-over under Subdivision 328-G of the ITAA 1997 in relation to the Property Interests.
Income Tax Assessment Act 1936 subsection 6(1) Income Tax Assessment Act 1936 section 272-80 of Schedule 2F Income Tax Assessment Act 1936 section 272-90 of Schedule 2F Income Tax Assessment Act 1997 subsection 108-5(1) Income Tax Assessment Act 1997 subsection 152-10(1A) Income Tax Assessment Act 1997 subsection 152-10(1AA) Income Tax Assessment Act 1997 paragraph 152-10(1AA)(b) Income Tax Assessment Act 1997 subsection 152-40(1) Income Tax Assessment Act 1997 subparagraph 152-40(1)(a)(iii) Income Tax Assessment Act 1997 section 328-110 Income Tax Assessment Act 1997 subsection 328-110(1) Income Tax Assessment Act 1997 subsection 328-110(6) Income Tax Assessment Act 1997 section 328-125 Income Tax Assessment Act 1997 paragraph 328-125(1)(a) Income Tax Assessment Act 1997 paragraph 328-125
Summary The proposed transfer of the property interests from the Company to the Family Trusts meets the requirements under section 328-430 to qualify for the small business restructure roll-over (SBRR) under Subdivision 328-G. Detailed reasoning Subdivision 328-G allows flexibility for owners of small businesses to restructure their businesses and the way their business assets are held while disregarding the tax gains and losses that would otherwise arise. Subdivision 328-G applies to the transfer of active assets as part of a genuine restructure on or after 1 July 2016. Subsection 328-430(1) provides that roll-over relief is available in relation to an asset if the following conditions are met: • The transaction is, or is part of, a 'genuine restructure of an ongoing business' (paragraph 328-430(1)(a)). • For the income year in which the transfer occurred, each party to the transfer is either a SBE, an affiliate of or connected with a SBE, or a partner in a partnership that is a SBE (paragraph 328-430(1)(b)).
• The transaction does not have the effect of materially changing the ultimate economic ownership of the transferred asset (paragraph 328-430(1)(c)). • The asset transferred is an active asset (paragraph 328-430(1)(d)). • The transferor and each transferee are residents of Australia (paragraph 328-430(1)(e)). • Both the transferor and each transferee choose to apply the roll-over (paragraph 328-430(1)(f)). Condition 1 - genuine restructure - paragraph 328-430(1)(a) Paragraph 328-430(1)(a) requires that the transfer of the asset is, or is part of, a 'genuine restructure of an ongoing business'. Law Companion Ruling LCR 2016/3 Small Business Restructure Roll-over: genuine restructure of an ongoing business and related matters (LCR 2016/3) provides guidance of the Commissioner's view on whether a transaction is, or is part of, a genuine restructure of an ongoing business. According to LCR 2016/3, whether a transaction is, or is part of, a 'genuine restructure of an ongoing business' is a question of fact that is determined having regard to all of the circumstances surrounding the restructure.
The Commissioner's view in LCR 2016/3 is that a 'genuine restructure of an ongoing business' is one that could be reasonably expected to deliver benefits to small business owners in respect of their efficient conduct of the business going forward. It can encompass a restructure of the way in which business assets are held where that structure is likely to have been adopted had the business owners obtained appropriate professional advice when setting up the business. It is a composite phrase emphasising that the SBRR is not available to small business owners who are restructuring in the course of winding down or realising their ownership interests. Paragraph 7 of LCR 2016/3 lists the following features that indicate that a transaction is, or is part of, a genuine restructure: • it is a bona fide commercial arrangement undertaken to facilitate growth, innovation and diversification, to adapt to changed conditions, or to reduce administrative burdens and compliance costs; • it is authentically restructuring the way the business is conducted, as opposed to a divestment or a preliminary step to facilitate the economic realisation of assets;
• the economic ownership of the business and its restructured assets is maintained; • the small business owners continue to operate the business through a different legal structure; and • it results in a structure likely to have been adopted had the small business owners obtained appropriate professional advice when setting up the business. Paragraph 10 of LCR 2016/3 lists some factors which tend to indicate that a restructure is not a genuine restructure of an ongoing business. These include: • it is a preliminary step to facilitate the economic realisation of assets, or takes place in the course of winding down to transfer wealth between generations; • it effects an extraction of wealth from the assets of the business for personal investment or consumption; • it creates artificial losses or brings forward their recognition; • it effects a permanent non-recognition of gain or creates artificial timing advantages; and/or • there are other tax outcomes that do not reflect economic reality.
The primary commercial driver for the Proposed Restructure is to achieve proper asset segregation to strengthen the protection of valuable assets against premises liability and other inherent risks associated with the Partnership's business and animal handling facilities more generally. The separation of the Company's property interests into multiple discretionary family trusts provides enhanced risk isolation, ensuring that each land aggregation is independently shielded from risks associated with other property holdings. As discussed in Example 1 of LCR 2016/3, a transaction implemented for asset protection purposes is an example of a transaction of a transaction that is or part of a 'genuine restructure of an ongoing business'. The Commissioner accepts that the transfer of the property interests from the Company to the Family Trusts, undertaken for the purposes of protecting core assets of the business, satisfies the 'genuine restructure of an ongoing business' condition. Other factors which support such a conclusion include:
• there is nothing to suggest that the proposed transfers are part of a divestment or preliminary step to facilitate the economic realisation of assets held by Person A (directly or indirectly), or that the Proposed Restructure is taking place in the course of winding down to transfer wealth between generations; • the ownership of the property interests by Family Trusts is in keeping with the structure under which property would have been purchased today; and • none of the factors listed in paragraph 10 of LCR 2016/3 which indicate a restructure is not a genuine restructure of an ongoing business apply. Condition 2: The SBE connection - paragraph 328-430(1)(b) Paragraph 328-430(1)(b) requires both the transferor and transferee to satisfy one or more of the following in the income year the transaction occurs: (i) be a SBE (ii) have an affiliate that is a SBE (iii) be connected with a SBE (iv) be a partner in a partnership that is a SBE. SBE
An entity is a SBE for an income year under subsection 328-110(1) if it carries on a business in the current income year and the aggregated turnover for the previous income year was less than $10 million or likely to be less than $10 million for the current income year. A person who is a partner in a partnership is not, in his or her capacity as a partner, a SBE (subsection 328-110(6)). Affiliate Affiliate is defined in subsection 328-130(1) as an individual or company that acts, or could reasonably be expected to act, in accordance with the entity's directions or wishes, or in concert with the entity, in relation to the affairs of the business of that individual or company. Under the subsection 328-130(1) definition of affiliate: • An individual or company that is not carrying on a business cannot be an affiliate of another entity. • Only an individual or company can be an affiliate of another entity. A partnership therefore cannot be an affiliate of another entity, but can have an affiliate that is in an individual or company.
However, an individual or company is not your affiliate merely because of the nature of the business relationship you and the individual or company share (subsection 328-130(2)). Subsection 328-130(2) provides the following example: A partner in a partnership would not be an affiliate of another partner merely because the first partner acts, or could reasonably be expected to act, in accordance with the directions or wishes of the second partner, or in concert with the second partner, in relation to the affairs of the partnership. Directors of the same company, or the company and a director of that company, would be in a similar position. Whether a person acts, or could reasonably be expected to act, in accordance with your directions or wishes, or in concert with you, depends on the circumstances of the case. The relevant factors that may support a finding that a person acts as an affiliate include: • the existence of a close family relationship between the parties; • the lack of any formal agreement or formal relationship between the parties setting out how the parties are to act in relation to each other;
• the likelihood that the way the parties act, or could reasonably be expected to act, in relation to each other would be based on the relationship between the parties rather than on formal agreements or legal or fiduciary obligations; and • the actions of the parties. Connected entity An entity is 'connected with' another entity pursuant to paragraph 328-125(1)(a) if either entity controls the other entity in a way described in section 328-125, or pursuant to paragraph 328-125(1)(b) if both entities are controlled in way described in this section by the same third entity. An entity (first entity) controls a partnership if the first entity, its affiliates, or the first entity together with its affiliates, own or have the right to acquire ownership interests in the partnership that carry between them the right to receive a percentage that is at least 40% of: • any distribution of income or capital of the partnership - subparagraph 328-125(2)(a)(i) and (iii); or • the net income of the partnership - subparagraph 328-125(2)(a)(ii).
An entity (first entity) controls a discretionary trust if the trustee of the trust acts, or could reasonably be expected to act, in accordance with the directions or wishes of the first entity, its affiliates, or the first entity together with its affiliates (subsection 328-125(3)). An entity also controls a discretionary trust if, for any of the 4 income years before that year, the trustee of the trust paid or applied at least 40% of the income or capital of the trust paid or applied by the trustee for that year for the benefit of the first entity or any of the first entity's affiliates or the first entity and any of its affiliates (subsection 328-125(4)). The parties to the transfer will be the Company (the transferor) and the Family Trusts (the transferees). The Partnership is a SBE in the 20XX income year on the basis that it carries on a business in the 2025 income year and its aggregated turnover for the 20XX income year was less than $10 million. The Partnership is the relevant SBE to consider for the purposes of applying the tests in paragraph 328-430(1)(b). The transferor and transferee are connected with a SBE - subparagraph 328-430(1)(b)(iii)
If both the Company and the Family Trusts are 'connected with' the Partnership in the income year of the transfer subparagraph 328-430(1)(b)(iii) is satisfied. The Company The Company is connected with the Partnership under paragraph 328-125(1)(a) if the Company controls the Partnership. The Company does not have any entitlement to the net income, income or capital distributions of the Partnership so does not control the Partnership in its own right under paragraph 328-125(2)(a). However, if either of Person D or Person C are considered 'affiliates' of the Company then the Company will control the Partnership: • under subparagraph 328-125(2)(a)(ii) since the Company's affiliates will have entitlements to at least 40% of the net income of the Partnership; and • under subparagraphs 328-125(2)(a)(i) and (iii) since the Company's affiliates will have the right to at least 40% of the income and capital distributions of the Partnership.
• Person D, Person C, Person B and Company B are partners in the Partnership. The following factors support a finding that Person D and Person C (as well as Person B and Company B) act, or could reasonably be expected to act, in concert with the Company, in relation to the affairs of the business of the partners 4 , and therefore are the Company's affiliates pursuant to subsection 328-130(1): • Person A and Person B control the Company and are closely connected to each of the partners (through close family relationships, consultancy roles and share property ownership). • All entities are part of the integrated X family business structure, with family members occupying key roles throughout. • The company holds land, and co-owns land with Person B, that is used by the Partnership (rent-free) in its business, creating operational dependence between the entities and demonstrating aligned economic interests.
• There is no formal agreement between the Company and the partners (or Partnership) dictating how the parties are to act in relation to the other and/or in respect of the use of the Company's land. Consequently, both Person D and Person C (as well as Person B and Company B) are affiliates of the Company pursuant to section 328-130. The Company would be considered to control the Partnership within the meaning in paragraph 328-125(2)(a) and is 'connected with' the Partnership within the meaning in paragraph 328-125(1)(a). The Company therefore satisfies subparagraph 328-430(1)(b)(iii). The Family Trusts The Family Trusts will be connected with the Partnership under paragraph 328-125(1)(a) if they are controlled by the Partnership. As the test in subsection 328-125(4) relies on previous distributions made by the trustee, this test will not be satisfied as the Family Trusts will be newly created trusts that don't have a distribution history.
However, the Partnership will control the Family Trusts pursuant to subsection 328-125(3) if the trustee of the Family Trusts act, or could reasonably be expected to act, in accordance with the directions or wishes of the Partnership, its affiliates, or the Partnership together with its affiliates. The following factors support a finding that the trustee of the Family Trusts could reasonably be expected to act in accordance with the directions or wishes of Person D, Person C, Person B and Company B (the partners of the Partnership): • The trustee companies of the Family Trusts will be owned by Person A, Person B, Person C and Person D (the same individuals who are either partners themselves or otherwise influence the Partnership). • The Family Trusts will each make FTEs with Person A as the test individual, establishing a formal connection to the same family group.
• The Family Trusts are being established specifically to hold property that will continue to be used by the Partnership in its farming operations, and the ongoing use of the properties by the Partnership creates an economic dependency that would reasonably lead the Family Trusts to act in accordance with the directions and wishes of the partners. • The members of the X family maintain close personal relationships and regularly participate in family decision-making together. • As the trustee of the Family Trusts could reasonably be expected to act in accordance with the directions or wishes of the partners, the Partnership will control the Family Trusts pursuant to subsection 328-125(3) and the Family Trusts are 'connected with' the Partnership within the meaning in paragraph 328-125(1)(a). The Family Trusts therefore satisfy subparagraph 328-430(1)(b)(iii). Therefore, each party to the transfer, being the Company (as transferee) and the Family Trusts (as transferor), are connected with the Partnership (a SBE) and subparagraph 328-430(1)(b)(iii) is satisfied.
Condition 3: ultimate economic ownership - paragraph 328-430(1)(c) Paragraph 328-430(1)(c) requires the transaction not to materially change the ultimate economic ownership of the asset. According to the Explanatory Memorandum (EM) to Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016 which introduced the provisions in Subdivision 328-G, the ultimate economic owners of an asset are the individuals who, directly or indirectly, beneficially own an asset. Under ordinary legal concepts, a beneficiary of a discretionary trust is not entitled to income or capital of the trust until the trustee exercises their discretion to distribute income or to make an appointment of capital. As such, beneficiaries of a discretionary trust cannot have ultimate economic ownership of the assets held by the trust, making it impossible to satisfy paragraph 328-430(1)(c). To address this problem, section 328-440 contains an alternative ultimate economic ownership test for discretionary trusts for the purposes of paragraph 328-430(1)(c). A transaction does not have the effect of changing the ultimate economic ownership of an asset if section 328-440 is satisfied.
Section 328-440 is satisfied if: (a) either or both of the following applies: (i) just before the transaction took effect, the asset was included in the property of a non-fixed trust that was a family trust; (ii) just after the transaction takes effect, the asset is included in the property of a non-fixed trust that is a family trust; and (b) every individual who, just before the transfer took effect, had the ultimate economic ownership of the asset was a member of the family group (within the meaning of Schedule to the Income Tax Assessment Act 1936 ) relating to the trust or trusts referred to in paragraph (a); and (c) every individual who, just after the transfer takes effect, has the ultimate economic ownership of the asset is a member of that family group. Section 328-440 is satisfied on the following basis:
• for the purposes of subparagraph 328-440(a)(ii), the property interests are included in the property of the Family Trusts (each a non-fixed trust that is a family trust on the basis that the trustee of each Family Trust will make a FTE under section 272-80 of Schedule 2F of the ITAA 1936) just after the transfers take effect; • for the purposes of paragraph 328-440(b), Person A and each of the other individual beneficiaries of the E Trust, being those who had the ultimate economic ownership of the property interests just before the transfers take effect, will be a member of the family group relating to the Family Trusts (i.e. the family group of Person A as the test individual, as defined in section 272-90 of Schedule 2F to the ITAA 1936); and • for the purposes of paragraph 328-440(c), each of the individual beneficiaries of the Family Trusts, being those who will have the ultimate economic ownership of the property interests just after the transfers take effect, will be a member of Person A's family group (i.e. the family group relating to the Family Trusts).
Therefore, the ultimate economic test in paragraph 328-430(1)(c) is satisfied because the alternative test in section 328-440 is satisfied. Condition 4: Active asset - paragraph 328-430(1)(d) Paragraph 328-430(1)(d) requires the asset to be a CGT asset (other than a depreciating asset) that is, at the time of the transfer, an active asset. Subparagraph 328-430(1(d)(ii) applies since subparagraph 328-430(1)(b)(iii) applies. Subparagraph 328-430(1)(d)(ii) Subparagraph 328-430(1)(d)(ii) requires the property interests to be a CGT asset (other than a depreciating asset) that is, at the time the transfers take place: • an active asset in relation to which subsection 152-10(1A) is satisfied in the income year the transfer takes place, or • an active asset in relation to which subsection 152-10(1A) would be satisfied in the income year the transfers take place if paragraph 152-10(1AA)(b) were disregarded. A CGT asset is defined in subsection 108-5(1) as any kind of property, or a legal or equitable right that is not property. Subsection 152-40(1) provides the meaning of an active asset: A CGT asset is an active asset at a time if, at that time:
(a) you own the asset (whether the asset is tangible or intangible) and it is used, or held ready for use, in the course of carrying on a business that is carried on (whether alone or in partnership) by: (i) you; or (ii) your affiliate; or (iii) another entity that is connected with you; or ... The asset subject to the proposed transfers (i.e. the property interests) are a CGT asset (other than a depreciating asset) that will, at the time the transfers take effect, be an active asset pursuant to subparagraph 152-40(1)(a)(iii) on the basis that it will be owned by the Company and used in the course of carrying on a business by the Partnership (an entity connected with the Company). Subsection 152-10(1A) is satisfied in relation to an asset in the income year if: (a) your affiliate, or an entity that is connected with you, is a CGT small business entity for the income year; and (b) you do not carry on a business in the income year (other than in partnership); and (c) if you carry on a business in partnership - the CGT asset is not an interest in an asset of the partnership, and
(d) in any case - the CGT small business entity referred to in paragraph (a) is the entity that, at the time in the income year, carries on the business (as referred to in subparagraph 152-40(1)(a)(ii) or (iii) or paragraph 152-40(1)(b)) in relation to the CGT asset. At the time the proposed transfers take effect, the property interests will be an asset to which subsection 152-10(1A) would be satisfied in that income year if paragraph 152-10(1AA)(b) were disregarded. This is because: • the Partnership (being an entity connected with the Company) would be a 'CGT small business entity' for the 2025 income year if paragraph 152-10(1AA)(b) were disregarded; • the Company and the Family Trusts do not carry on a business in the 2025 income year; and • the Partnership is the entity that uses the property interests in carrying on the business (as referred to in subparagraph 152-40(1)(a)(iii)). Therefore the condition in paragraph 328-430(1)(d) is satisfied. Condition 5: Residency requirement - paragraph 328-430(1)(e)
Both the transferor and transferee must meet the residency requirement in section 328-445. This requires a company to be an Australian resident and a trust to be a 'resident trust for CGT purposes'. In the context of trusts that are not unit trusts, a resident trust for CGT purposes is defined in section 995-1 as a trust that, at any time during the income year, has a trustee that is an Australian resident or the central management and control of the trust is in Australia. The Company is an Australian resident for tax purposes. The Family Trusts will be resident trusts for CGT purposes on the basis the trustee will be an Australian incorporated company that will therefore be a 'resident' or 'resident of Australia' under subsection 6(1) of the ITAA 1936. Therefore, both the Company and the Family Trusts satisfy the residency requirement under section 328-445 and as a consequence also satisfy paragraph 328-430(1)(e). Condition 6: Election to apply the roll-over - paragraph 328-430(1)(f)
Both the transferor and transferee must elect to apply the roll-over under Subdivision 328-G in relation to the assets transferred. An assumption is made for the purposes of this ruling that the Company and the Family Trusts will choose to apply the roll-over under Subdivision 328-G. Roll-over denied for tax exempt and complying superannuation entities Subsection 328-430(2) states that a roll-over under Subdivision 328-G is not available if the transferor or transferee is either an exempt entity or a complying superannuation entity. Neither the Company nor the Family Trusts are such entities so are not denied from choosing the Subdivision 328-G roll-over if subsection 328-430(1) is otherwise satisfied. Conclusion Since all the requirements in subsection 328-430(1) are satisfied, the proposed transfer of the property interests from the Company to the Family Trusts qualifies for the roll-over under Subdivision 328-G. > 1 As defined in section 272-80 of Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936). 2 Prior to the Proposed Restructure the trustee of the E Trust is expected to be changed to Person A. 3 Person E is Person A and Person B's child. 4
A partnership is not a separate legal identity. Each partner of a partnership is carrying on the partnership business. It follows that, where a partnership is carrying on a business, each partner of that partnership is considered to be carrying on the business (as noted in ATO Interpretative Decision 2003/359). Therefore, when considering the 'affairs of the business of the individual or company', this includes an individual's or company's business affairs as a partner in a partnership.