Partnerships

The acquisition of property by a partnership is subject to complex specific charging provisions.

A straightforward acquisition by a partnership (acting through a representative partner) from a vendor who is not a partner and with whom none of the partners are connected is subject to SDLT on the normal basis.  Each of the partners is jointly and severally liable for the tax.

Specific technical charging provisions apply to certain transactions involving the transfer of:

• A chargeable interest to a partnership by a partner or connected person;
• An interest in a property investment partnership (broadly a partnership whose sole or main activity is investing or dealing in SDLT chargeable interests);
• A chargeable interest from a partnership to any of its partners or persons connected with them.

The charging provisions are highly technical and in each case aim to impose SDLT on a percentage of the market value transferring.  Generally the percentage chargeable is determined by the difference between the proportion of the interest to which an individual partner was entitled before the transaction compared to their entitlement immediately after the transaction.

In any transaction involving a partnership, detailed SDLT advice is recommended.  For more information please email jfeaster@edftax.co.uk or call 07526 003021 to speak to John.