Lee Sharpe looks at whether a joint property letting activity amounts to a partnership, and why it is relevant to landlords.
Property partnerships seem popular these days – typically, as a stepping-stone to greater things. Regular readers will know that I have long criticised HMRC’s published position on whether a property partnership exists, as distinct from simply co-owned property. My argument is that HMRC has drawn up its guidance to set an unreasonably high threshold to ‘make the grade’ as a partnership.
Even so, I have counselled that would-be partners should be careful about what they wish for:
There may be capital gains tax (CGT) and stamp duty land tax (SDLT) implications for creating or joining a property-letting partnership.
There may even be SDLT consequences for changing the property income-sharing ratio.<