CG27300 | Partnerships: fractional interests in partnership assets acquired in stage: SPD12.
From HM Revenue & Customs · Capital Gains Manual
Section 11 SP D12
Where partners acquire their fractional interests in partnership assets in stages over a period of time the acquisition costs are pooled.
Example
X was admitted to a partnership in Year 1 at which time he acquired a 20% interest in goodwill. His interest in goodwill was increased in subsequent years:
| Year | Percentage | - | Amount |
|---|---|---|---|
| Year 1 | 20% | cost | £100,000 |
| Year 3 | 10% | cost | £50,000 |
| Year 5 | 5% | cost | £35,000 |
The base cost of Partner X’s 35% interest in goodwill for CG purposes is £185,000.
Any subsequent reduction in Partner X’s interest in goodwill will be treated as a part-disposal out of the pooled expenditure.