SCHEDULE 7PARTNERSHIPS
PART 4TRANSACTIONS INVOLVING TRANSFERS TO A PARTNERSHIP
Transfer of partnership interest pursuant to tax avoidance arrangements
I1C118
1
This paragraph applies where—
a
there is a transfer of a chargeable interest to a partnership (““the land transfer””);
b
the land transfer falls within paragraph 13(1);
c
there is subsequently a transfer of an interest in the partnership (““the partnership transfer””);
d
the partnership transfer is made—
i
if the land transfer falls within paragraph 13(1)(a) or (b), by the person who makes the land transfer;
ii
if the land transfer falls within paragraph 13(1)(c), by the partner concerned;
e
the partnership transfer is made pursuant to arrangements which are, or form part of, tax avoidance arrangements that were in place at the time of the land transfer;
f
the partnership transfer is not (apart from this paragraph) a chargeable transaction.
2
For the purposes of this Act, the partnership transfer—
a
is taken to be a land transaction, and
b
is a chargeable transaction.
3
The partners are taken to be the buyers in the transaction.
4
The chargeable consideration for the transaction is taken to be equal to a proportion of the market value, as at the date of the transaction, of the interest transferred by the land transfer.
5
That proportion is—
a
if the person making the partnership transfer is not a partner immediately after the partnership transfer, that person's partnership share immediately before that transfer;
b
if the person is a partner immediately after the partnership transfer, the difference between the person's partnership share before and after that transfer.
6
The partnership transfer and the land transfer are taken to be linked transactions.
7
Paragraphs 9 to 11 (responsibility of partners) have effect in relation to the partnership transfer, 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.
8
In this paragraph, “"tax avoidance arrangements”” has the meaning given by section 31.