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Joint property letting vs partnerships

Shared from Tax Insider: Joint property letting vs partnerships
By Lee Sharpe, February 2024

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.  

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