INCOME TAX ACT 1967 (ACT 53) PART III - ASCERTAINMENT OF CHARGEABLE INCOME Chapter 8 - Special cases
Section 57. Provisions applicable where partnership is a partner in another partnership.
Where a partnership (in this section referred to as the subsidiary partnership) is a partner in another partnership (in this section referred to as the main partnership), then, in relation to a business of the main partnership-
(a) throughout any period that a person is a partner in the subsidiary partnership and the subsidiary partnership is a partner in the main partnership it shall be postulated that the person in question was a partner in the main partnership in place of the subsidiary partnership, and the adjusted income under subsection 55 (5) or 56(8) (in this section referred to as the computed adjusted income) of that person for the basis period for a year of assessment as the sole proprietor from his proprietorship business or as continuing partner from his continuing proprietorship business, as the case may be, in relation to the main partnership shall be ascertained under section 55 or under section 55 in conjunction with section 56, as the case may be; and
(b) the computed adjusted income for that basis period shall be divided between the partners of the subsidiary partnership in like manner as divisible income is divided under subsection 55 (4) or 56 (6), as the case may be, and the amount of the share thereof so ascertained of any such partner as the sole proprietor or as the continuing partner as mentioned in subsection 55 (4) or 56 (6), as the case may be, shall be taken to be his adjusted income for the basis period for that year of assessment from the proprietorship business or continuing proprietorship business, as the case may be, which he is treated as having in relation to the main partnership by virtue of paragraph (a).
