Capital Gains Tax: relief on disposals of joint interests in land and private residences for limited liability partnerships and Scottish partnerships
Published 15 March 2023
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Who is likely to be affected
Members in limited liability partnerships (LLPs) and partners in Scottish partnerships who claim relief on an exchange of interest in land or private residences held, prior to the disposal, by the partnership.
General description of the measure
The measure makes changes to the legislation for Capital Gains Tax roll-over relief and private residence relief to make sure that LLPs and Scottish partnerships which hold title to land are included.
Policy objective
This measure provides consistency and fairness for partnerships in different parts of the UK on Capital Gains Tax roll-over relief and private residence relief.
Background to the measure
This measure was announced at Tax Administration and Maintenance Day 2021.
Detailed proposal
Operative date
This measure will have effect for claims for relief made on or after 6 April 2023.
Current law
Current law is contained in sections 248A and 248E of the Taxation of Chargeable Gains Act 1992.
Proposed revisions
Legislation will be introduced in Spring Finance Bill 2023 to amend sections 248A and 248E of the Taxation of Chargeable Gains Act 1992.
These clauses clarify legislation to ensure roll-over relief and private residence relief are available for LLPs and Scottish partnerships when an exchange of interest in land or private residences held by the LLP or partnership takes place as it is when the land is held by the individual members or partners.
Summary of impacts
Exchequer impact (£m)
| 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|---|---|
| — | Negligible | Negligible | Negligible | Negligible | Negligible |
This measure is expected to have a negligible impact on the Exchequer.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
This measure is expected to have a positive impact on a relatively small number of individuals (members of LLPs and partners of Scottish partnerships) by making sure that they are entitled to roll-over relief and private residence relief. This will now allow all individuals the option of using the reliefs.
This measure is not expected to impact on family formation, stability or breakdown.
Customer experience could see an improvement as this measure will clarify that the reliefs can be claimed by members or partners of LLPs or Scottish partnerships.
This will positively impact members of LLPs and partners of Scottish partnerships as the change will clarify that they are entitled to roll-over relief and private residence relief.
Equalities impacts
It is not expected that there will be adverse effects on any group sharing protected characteristics.
Impact on business including civil society organisations
There is expected to be no impact on businesses and civil society organisations as this measure only affects individuals.
Operational impact (£m) (HMRC or other)
There are no operational impacts for HMRC in implementing this measure.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through information collected by tax returns and feedback from stakeholder groups.
Further advice
If you have any questions about this change, contact the Capital Gains Tax policy team on email: cgtbudget@hmrc.gov.uk.