Taxation of Partnerships 3rd ed

Partnership tax issues cut across most of the familiar taxes, but apply them in a particular way. The taxation of partnerships relies on statutory provisions and case law, of course, but is also dependent on HMRC practice and interpretations. This book is a practical guide to the issues arising.

The book addresses all the key taxes – income tax, capital gains tax, SDLT, corporation tax. It clearly explains the principles applying to different sorts of partnerships (including LLPs, limited partnerships and partnerships with corporate members) and covers the more complex areas including mergers and demergers, incorporations, administration (including partnership returns) etc., losses, capital allowances, and other practical matters arising.

Dedicated chapters look at partnerships with an international dimension, at the issues arising when a partner dies, and at pensions and annuities.

• Changes to APR and BPR which will have a significant impact on farming partnerships
• The removal of most tax advantages for non-UK domiciled individuals
• The circumstances in which HMRC may challenge whether a partnership exists or whether a person is actually a partner
• When it might be appropriate to use a limited partnership structure
• An outline of some of the difficulties that can be encountered in connection with ownership of land by partners and partnerships and the potential impact this can have on CGT, including a discussion of the Proctor v Proctor case and the Warrington (or Jenkins) v Brown case
• Additional detail about the cash basis and simplified expenses available when calculating trading profits for unincorporated businesses, with some rewriting and reordering of the surrounding text
• HMRC clarification of the capital allowances position for corporate partners
• The impact of basis period reform
• Discussion of the HMRC v BlueCrest Capital Management LP and others and Boston Consulting Group UK LLP and others v HMRC cases, which demonstrate how HMRC may use ITTOIA 2005, s. 850 to assess certain receipts from the partnership as partnership income, even where they have been identified by the partnership as something else
• The Court of Appeal judgment in the BlueCrest Capital Management (UK) LLP case, which considered the meaning of “significant influence” in the Condition B test for salaried members
• Updated HMRC guidance in respect of Condition C for salaried members in relation to anti-avoidance, genuine finance and non-recourse loans and the subsequent announcement by HMRC that, following representations from the CIOT, they will be amending their guidance to reverse the February 2024 changes
• The changes to the cash basis of calculating profits and how they affect loss relief
• The increased tax rate of 14% that will apply to business asset disposal relief claims from 6 April 2024, increasing to 18% from 6 April 2026
• Updated SDLT rates
• A section on the annual tax on enveloped dwellings and its impact on partnerships
• Discussion of the abolition of the pension lifetime allowance and introduction of the lump sum allowance
• The introduction of MTD for income tax, excluding partnership returns, which perhaps demonstrates how uneasily partnerships fit within the tax regime
• Changes to the BPR treatment of shares such as AIM shares, which are designated as “not listed” on the markets of recognised stock exchanges