Finance Act 2014

PART 1 Partnerships as persons

“Person” includes a partnership

1 (1) Persons carrying on a business in partnership—

(a) are regarded as a person for the purposes of this Part of this Act;

(b) are referred to in this Part as a “partnership”.

(2) But in this Part of this Act “partnership” does not include a body of persons forming a legal person that is distinct from themselves (and paragraphs 2 to 21 may accordingly be disregarded in applying this Part of this Act to such a body of persons).

(3) In the references in this Part to carrying on a business in partnership, “partnership” has the same meaning as in the Partnership Act 1890.

Continuity of partnerships

2 A partnership is regarded for the purposes of this Part of this Act as continuing to be the same partnership (and the same person) regardless of a change in membership, provided that a person who was a member before the change remains a member after the change.

Meeting of conditions

3 (1) Accordingly, for the purposes of this Part of this Act a partnership is taken—

(a) to have done any act that bound the members, and

(b) to have failed to comply with any obligation of the firm which the members failed to comply with;

but see sub-paragraph (3).

(2) In sub-paragraph (1), “the members” means those who were the members of the partnership or (in the case of a limited partnership) the general partners of the partnership at the time when the act was done or the failure to comply occurred.

(3) Where a member of a partnership (“M”) has done, or failed to do, an act at any time (“the earlier time”), the partnership is not treated at any later time as having done, or failed to do, that act unless—

(a) M, or

(b) another person who was a member of the partnership at the earlier time,

is a member of the partnership at the later time.

(4) In this paragraph “firm” has the same meaning as in the Partnership Act 1890.

Threshold conditions: actions of partners in a personal capacity

4 (1) Sub-paragraph (2) applies where—

(a) a relevant threshold condition is met by a person (“P”) at a time (“the earlier time”) when P is a controlling member, or managing partner, of a partnership,

(b) a determination under section 237 is made at a later time in relation to the partnership, and

(c) P is a controlling member, or managing partner, of the partnership at the time of the determination.

(2) The partnership is regarded as having met the threshold condition at the earlier time (regardless of whether or not the partnership was bound by the act or omission as a result of which P met the threshold condition).

(3) “Relevant threshold condition” means a threshold condition specified in any of the following paragraphs of Schedule 34—

(a) paragraph 2 (deliberate tax defaulters);

(b) paragraph 4 (dishonest tax agents);

(c) paragraph 6 (criminal offences);

(d) paragraph 7 (opinion notice of GAAR advisory panel);

(e) paragraph 8 (disciplinary action by a professional body);

(f) paragraph 9 (disciplinary action by a regulatory authority);

(g) paragraph 10 (failure to comply with information notice).