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Everett assignment CGT amendments released


Treasury has released exposure draft legislation on the denial of small business CGT concessions to partners who undertake Everett assignments.

By Jotham Lian 9 minute read

In the federal budget this year, the government announced that  partners that alienate their income by creating, assigning or otherwise dealing in rights to the income or capital of a partnership will no longer be able to access the small business CGT concessions in relation to these rights unless the right is a membership interest in the partnership.

The announcement follows the decision in Federal Commissioner of Taxation v Everett [1980] HCA 6 (FCT v Everett), where the High Court found that such an assignment meant that the income received on trust did not form part of the income of the partner.

Instead, the income was received on trust for the assignee and taxed in the hands of the assignee as a result of Division 6 of Part III of the ITAA 1936.


The use of such assignments and similar arrangements has subsequently become common for partners seeking to reduce income tax, resulting in a CGT event occurring and would usually result in a substantial capital gain for the partner.

As a result of the new measure, the small business CGT concessions are only available in relation to a CGT event that relates to a right or interest that entitles an entity to the income or capital of a partnership if the right or interest is a membership interest of the entity that has the entitlement.

Treasury has now released draft legislation and accompanying explanatory materials implementing this budget announcement, with stakeholders welcomed to comment by 31 October.

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Jotham Lian

Jotham Lian


Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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