SDLTM09790 | SDLT - higher rates for additional dwellings: Condition C – partnership interests - Para 14 Sch 4ZA FA2003

Some major interests in dwellings held by a partner in a partnership can be ignored despite still being owned at the end of the day which is the effective date of the transaction [Para 14].

This can apply where an individual purchaser is a partner in a partnership and is purchasing a major interest in a dwelling which is not being purchased for partnership purposes [Para 14(1)]. This is most likely the case where an individual is buying a main residence for themselves.

The partnership must be carrying on a trade and the dwelling in which the purchaser already has an interest via the partnership must be used for the purposes of the partnership’s trade [Para 14(2)].

A property letting business or any business exploiting land for rent carried on by a partnership is not a trade.

A partner in a partnership will be treated as a joint purchaser of land purchased by or on behalf of the partnership [Para 2 Sch 15 FA 2003]. In this case the tests will need to be applied in respect of all the partners, and if any one partner would be liable to the higher rates then the whole purchase will be liable.

An interest in a dwelling held for the purposes of a partnership cannot be ignored when a dwelling is being purchased for the purposes of the partnership.