SDLTM33780 - Partnership share for the purposes of Para20

For the purposes of FA03/Sch15 generally, partnership share at any time refers to the proportion in which the partner is entitled at that time to share in the income profits of the partnership in accordance with Para34(2). 

There are, however, specific additional rules that determine the partnership share to be used in the calculation of the sum of the lower proportions for the purposes of Para20. These can be found in Paras21 and 22.  

Para 21 provides that where the property was transferred into the partnership on or after 20 October 2003 but SDLT was not paid or the transfer was not duly stamped with ad valorem stamp duty, then the transferee partner's proportion is zero. The effect of this is that the SDLT charge on transfer of land to the transferee partner is on the entire market value of the land transferred out of the partnership. 

Para 22 deals with the scenario where the property in question was transferred into the partnership either: before 20 October 2003; or, if transferred in at a later date, SDLT was paid or the transfer of the property was duly stamped with ad valorem stamp duty. 

Where Para 22 applies the partnership share attributable to the partner is their actual share, but specific rules apply to calculate this. If the property was transferred to the partnership before 20th October 2003, the starting point for the partner’s attributable share is their actual share at 19th October 2003 or the date on which the partner became a partner if later. 

If the property was transferred to the partnership on or after 20th October 2003 with tax correctly paid, the starting point for the partner's attributable share is their actual share at the effective date the property was transferred to the partnership, or the date on which the partner became a partner if later. 

The actual share is adjusted up or down (but never below zero) by changes which have occurred before the transfer of the property out of the partnership. Increases in partnership share are only counted where SDLT or stamp duty has been correctly paid on the transfer(s) which triggered the increase(s).