Lee Sharpe looks at the special rules for property assets within a partnership.
The theory behind partnership taxation is logical and relatively straightforward. But partnerships themselves can be quite complex and mutable animals, so those initially simple rules sometimes become quite contorted as new partners join, others leave and sharing ratios change over time.
Partnership disposals: The basics
Tax law deems partnership assets to be held by the partners directly, in accordance with their underlying interests (TCGA 1992, s 59).
When a partnership disposes of a chargeable asset for CGT purposes, this is first recorded in the partnership’s own tax return using aggregate figures but is then attributed to each partner on their own individual self-assessment return.
