CheckLists.Tax (beta)
H3. Change in partner sharing ratios
INHERITANCE TAX
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Gift with reservation
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- Whether there is a gift
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- No gift if transfer is commensurate with contribution made by receiving partner (IHTM14315).
- See further C1. Gifts in general.
Legislation:
Cases:
HMRC manuals: IHTM14315;
Commentary:
See also:
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- Gift of partnership share where donor retains his/her own share
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- If donor partner continues in occupation of the partnership property, this would arguably be attributable to that partner's continuing share (IHTM14332, example 4).
- Query whether donor has ability to clawback gifted interest under terms of partnership agreement.
Legislation:
Cases:
HMRC manuals: IHTM14432;
Commentary: McCutcheon 7-146;
See also:
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- Adjusting partnership sharing ratio to provide full consideration for gift of land between partners
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- In order to fall within the full consideration exception to s.102A.
Legislation: FA 1986, s.102A;
Cases:
HMRC manuals:
Commentary: McCutcheon 7-148;
See also:
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- Gift of share of capital interest but retention of income rights
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- If a partner gifts part of his/her share in the capital of the partnership but there is no corresponding adjustment to the donor's share in the income, query whether that is simply a gift of the distinct capital rights or a reservation of a benefit through retaining income rights arising from that capital.
- If the transfer of capital rights is compensation for work, there may be no gift (IHTM14315).
Legislation:
Cases:
HMRC manuals: IHTM14315;
Commentary: McCutcheon 7-150;
See also:
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