BLM81085 | Sale of lessor companies and similar arrangements: partnerships: amount of income - change in partner company’s interest in the partnership

Section 423 CTA2011

In the case of a partnership the basic amount of the income is adjusted by apportionment to reflect the change in the partner company’s interest in the partnership business.

The basic amount is therefore apportioned in line with the fall in the company’s relevant percentage share on the day.

Example: income amount change in interest in business

View diagram for this example

In this example the interest of A Ltd in the business has fallen by 80%. 80% is the appropriate percentage of the basic amount.

If, for the P partnership, PM = 2,500 and TWDV = £1,500 then the basic amount is 2,500 - 1,500 = 1000.

The appropriate percentage of the basic amount is 80% therefore the income amount is 800.