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Discounts have in the past been taken from the proportionate part of the overall value of the partnership assets in arriving at the value of a transferor's interest in a partnership, and have varied according to the circumstances. However, there is now some doubt as to whether discounts are allowed. HMRC states¹ that the previous practice of allowing a discount for the costs of sale is effectively overturned by the decision in Gray v IRC².

However, should a discount still be permitted, the amount is calculated on normal valuation principles and should encompass such matters as restricted rights over property; for example land and buildings which would need to be sold before an aliquot share could be distributed, the cost and uncertainty of dissolving the partnership and delay in receiving the net proceeds.

At one end of the spectrum, where personal representatives are entitled to a sum of money from the surviving partners, no discount is allowed unless the surviving partners