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SDLT & Partnerships

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Caroline Dowding

Posted on:
16/10/17 12:11
Subject: SDLT & Partnerships

Will SDLT become chargeable if Husband and Wife are in partnership with son, H& W owning the land which is held as partnership property and H gifts his beneficial interest in his interest in the land to W by Declaration of Trust?

Will this differ if the partnership was set up less than 3 years ago under the Sch15, S17 FA2003 anti avoidance provisions?

We are looking at it from a succession element to get CGT uplift on death of wife who is terminally ill.
Justin Bryant

Posted on:
24/10/17 17:30
Subject: RE: SDLT & Partnerships

As a matter of partnership law, the partners do not own a direct beneficial interest in (an undivided share of) the partnership assets. Instead they have a partnership interest which equates to an indirect interest the total net assets of the partnership itself, which is a chose in action, and so do not have a beneficial interest in them and therefore cannot (individually) transfer any such interest as a matter of property law, although the partnership can of course collectively transfer a partnership asset.

Although the analysis is not simple, I expect this can be done SDLT-free under Schedule 15 FA 2003 and if not perhaps you could first incorporate the partnership under s162 TCGA without SDLT and then transfer the shares.

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