SCHEDULE 7PARTNERSHIPS

PART 4TRANSACTIONS INVOLVING TRANSFERS TO A PARTNERSHIP

Transfer of chargeable interest to a partnership: general

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1

This paragraph applies where—

a

a partner transfers a chargeable interest to the partnership,

b

a person transfers a chargeable interest to a partnership in return for an interest in the partnership, or

c

a person connected with—

i

a partner, or

ii

a person who becomes a partner as a result of or in connection with the transfer,

transfers a chargeable interest to the partnership.

2

This paragraph applies whether the transfer is in connection with the formation of the partnership or is a transfer to an existing partnership.

3

The chargeable consideration for the transaction is taken to be equal to—

MV × ( 100 - SLP ) %math

Figure 9 where—

MV is the market value of the chargeable interest transferred, and

SLP is the sum of the lower proportions.

4

Paragraph 14 provides for determining the sum of the lower proportions.

5

Part 7 applies if the whole or part of the chargeable consideration for the transaction is rent.

6

Paragraphs 9 to 11 (responsibility of partners) have effect in relation to a transaction to which this paragraph applies, but the responsible partners are—

a

those who were partners immediately before the transfer and who remain partners after the transfer, and

b

any person becoming a partner as a result of, or in connection with, the transfer.

7

This paragraph has effect subject to any election under paragraph 36.