Transfer of chargeable interest from a partnership: sum of the lower proportionsU.K.
[F120(1)The sum of the lower proportions in relation to a transaction to which paragraph 18 applies is determined as follows:—
Step One
Identify the relevant owner or owners.
A person is a relevant owner if—
(a)immediately after the transaction, he is entitled to a proportion of the chargeable interest, and
(b)immediately before the transaction, he was 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 before the transaction—
(a)he was a partner, and
(b)he was the relevant owner [F2or was 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 is entitled immediately after 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—
(a)the proportion of the chargeable interest attributable to the partner, or
(b)if lower, the partnership share attributable to the partner.
The proportion of the chargeable interest attributable to the partner is—
(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;
(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.
Paragraph 21 provides for determining the partnership share attributable to the partner.
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.
(2)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.
[F5(3)For the purpose of paragraph (b) of Step 2 a company is to be treated as an individual connected with the relevant owner in so far as it—
(a)holds property as trustee, and
(b)is connected with the relevant owner only because of [F6section 1122(6) of the Corporation Tax Act 2010].]]
Textual Amendments
F1Sch. 15 Pt. 3 substituted (with effect in accordance with Sch. 41 para. 3 of the amending Act) by Finance Act 2004 (c. 12), Sch. 41 para. 1
F2Words in Sch. 15 para. 20(1) substituted (with effect in accordance with s. 72(13) of the amending Act) by Finance Act 2007 (c. 11), s. 72(7)(a) (with s. 72(2)(16)(17))
F3Words in Sch. 15 para. 20(1) inserted (with effect in accordance with s. 72(13) of the amending Act) by Finance Act 2007 (c. 11), s. 72(7)(b) (with s. 72(2)(16)(17))
F4Words in Sch. 15 para. 20(2) omitted (with effect in accordance with s. 29(4) of the amending Act) by virtue of Scotland Act 2012 (c. 11), s. 44(2)(b)(3)(b), Sch. 3 para. 26(3) (with s. 29(5)(6)); S.I. 2015/637, art. 2
F5Sch. 15 para. 20(3) inserted (with effect in accordance with s. 72(13) of the amending Act) by Finance Act 2007 (c. 11), s. 72(8) (with s. 72(2)(16)(17))
F6Words in Sch. 15 para. 20(3)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 418(3) (with Sch. 2)