The sum of the lower proportions in relation to a transaction to which paragraph 10 applies is determined as follows:—

• Step One

  Identify the relevant owner or owners.

  A person is a relevant owner if—

  1. (a)

     immediately before the transaction, he was entitled to a proportion of the chargeable interest, and

  2. (b)

     immediately after the transaction, he is a partner or connected with a partner.

• Step Two

  For each relevant owner, identify the corresponding partner or partners.

  A person is a corresponding partner in relation to a relevant owner if, immediately after the transaction—

  1. (a)

     he is a partner, and

  2. (b)

     he is the relevant owner F2or is an individual connected with the relevant owner.

  F3(If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.)

• Step Three

  For each relevant owner, find the proportion of the chargeable interest to which he was entitled immediately before the transaction.

  Apportion that proportion between any one or more of the relevant owner’s corresponding partners.

• Step Four

  Find the lower proportion for each person who is a corresponding partner in relation to one or more relevant owners.

  The lower proportion is—

  1. (a)

     the proportion of the chargeable interest attributable to the partner, or

  2. (b)

     if lower, the partner’s partnership share immediately after the transaction.

  The proportion of the chargeable interest attributable to the partner is—

  1. (i)

     if he is a corresponding partner in relation to only one relevant owner, the proportion (if any) of the chargeable interest apportioned to him (at Step Three) in respect of that owner;

  2. (ii)

     if he is a corresponding partner in relation to more than one relevant owner, the sum of the proportions (if any) of the chargeable interest apportioned to him (at Step Three) in respect of each of those owners.

• Step Five

  Add together the lower proportions of each person who is a corresponding partner in relation to one or more relevant owners.

  The result is the sum of the lower proportions.

For the purposes of this paragraph persons who are entitled to a chargeable interest as beneficial joint tenants F4... shall be taken to be entitled to the chargeable interest as beneficial tenants in common F4... in equal shares.