Anti-avoidance measure for partnerships
The measure
Anti-avoidance is introduced to stop schemes taking advantage of special provisions for partnerships. This is by extending a pre-existing stamp duty land tax general anti-avoidance rule so that it takes precedence over the partnership provisions.
Who will be affected?
It will affect transactions in UK property between partnerships and their partners or, in certain cases, persons connected with the partners.
When?
The measure takes effect from 24 March 2010, although transitional rules will potentially protect transactions involving a number of steps, if one or more of those steps was completed before today.
The effect of the measure is not far short of abolishing a relief for transfers of UK property into or out of partnerships. That is to say, the relief may now only apply if no or little consideration is given by the purchaser. This measure, as well as undoubtedly blocking certain avoidance structures, will therefore have a significant impact on ordinary commercial restructuring. These will involve contributions and dissolutions of partnerships, incorporations from partnerships and the introduction of partnerships into existing offshore structures to permit onshore management.
