SDLTM34100 | Special provisions relating to partnerships: Partnership Interests: application of provisions about exchanges etc.

A property investment partnership consisting of three partners A, B and C owns two properties. A has a 50% share, B and C 25% each.

D is to be admitted to the partnership acquiring a 25% share from A, he is giving A 25 acres of land as consideration for this share.

The partnership interest acquired by D will be treated as a major interest in land as the relevant partnership property consists of major interests, therefore the exchange provisions in FA03/Sch4/para5 apply to the land given by D as consideration for the partnership share.

As a result both legs of the exchange are liable to SDLT: a liability arises on D’s acquisition of the partnership share (para14) and on A’s acquisition of the 25 acres of land (FA03/Sch4/para5).