The commentary below considers the exposure of partners to tax on chargeable gains of the partnership. For an overview of the taxation of chargeable gains generally, see C1.101.
Tax treatment of gains arising in UK partnerships
For UK tax purposes, UK partnerships are transparent. See B7.407. This means that where two or more persons carry on a trade or business in partnership or in limited liability partnership (LLP)1:
- Ìý
•ÌýÌýÌýÌý tax in respect of chargeable gains accruing on a chargeable disposal of any partnership asset is charged on the partner/member separately, and
- Ìý
•ÌýÌýÌýÌý any partnership dealings are treated as dealings by the partners/members and not by the firm as such
Although the partnership or LLP is transparent, the partnership tax return and partnership statement must include particulars relevant to chargeable disposals2. See B7.523. Each partner of the partnership/member of the LLP reports their share of the disposal on their tax return and pays tax accordingly.
For the definition of a partnership, see B7.101.
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