SDLTM09390 | Example 2 – partnership transfer

Nina, Ophelia and Penny are friends and have carried out a property letting business through a partnership for many years.

The partners wish to continue their business but want to minimise risk and so they decide to incorporate the business. Nina, Ophelia and Penny purchase the shares in an off the shelf company, and the properties are transferred to the company.

Here, Section 75A will not apply. The first transaction is one in shares and therefore Section 75C(1) will apply and this transaction is ignored for the purposes of Section 75A. After the purchase of the company, all that has happened is the transfer of property from the established partnership to the company owned by Nina, Ophelia and Penny. Section 75A does not apply and instead, the special partnership provisions of Schedule 15 will apply when calculating the chargeable consideration for SDLT purposes.