SP D12 is a useful guide as to how the CGT rules should be expected to apply to partnerships and it fills in important gaps in the legislation. However, in practice it can lead to some surprising results and its non-statutory footing can cause uncertainty for taxpayers and advisers. SP D12 treats partners as holding a share in the partnership’s property, with some flexibility as to how this share would be determined. Tax charges can arise on distributions, contributions and changes to profit-sharing ratios. The application of certain reliefs is explicitly addressed; on others, SP D12 is silent, but their application is generally accepted. Practitioners should approach SP D12 with care.
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SP D12 is a useful guide as to how the CGT rules should be expected to apply to partnerships and it fills in important gaps in the legislation. However, in practice it can lead to some surprising results and its non-statutory footing can cause uncertainty for taxpayers and advisers. SP D12 treats partners as holding a share in the partnership’s property, with some flexibility as to how this share would be determined. Tax charges can arise on distributions, contributions and changes to profit-sharing ratios. The application of certain reliefs is explicitly addressed; on others, SP D12 is silent, but their application is generally accepted. Practitioners should approach SP D12 with care.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
