IFM37232 | Charging Provisions: Operation of the charge: Disposals

Disposals

Disposal of partnership assets

TCGA92/S103KA(2)

TCGA92/S103KB

Where an individual disposes of a right to carried interest in return for consideration this will be treated as carried interest arising to that individual at the time of the disposal. This includes the loss or cancellation of a right to carried interest. Variations to a right to carried interest are also treated as a disposal but only for carried interest occurring on or after 22 October 2015 (Finance Act (No.2)/S43(3)).

The general rules in TCGA92, which determine whether a disposal has taken place and for what consideration, will also apply to this section. In particular, TCGA92/S17 will apply to treat an individual as having received market value for a right to carried interest when it is disposed of otherwise than at arm’s length. In circumstances where an individual is forced to dispose of their right to receive carried interest, TGCA92/S17(1)(b) will not apply to the individual making the disposal, where the disposal is sufficiently disassociated to services rendered.