In this week’s Q&A, Alexander McCarthy, tax adviser at Croner-i, explains the tax implications of joining an existing partnership as an equity partner
My client is a farming partnership that owns the freehold all of the land of the farm business. There is a large agricultural mortgage on the land. The partners are a husband and wife.
Their son would like to join the partnership as an equity partner, and he will introduce £4,000. What are the stamp duty land tax (SDLT) and capital gains tax (CGT) consequences of him doing so?
Working on the principle that a holdover relief claim is made this transfer can be made both stamp duty land tax (SDLT) and capital gains tax (CGT) free.
SDLT
Normally when an interest in land or property, such as farmland, changes hands there will be SDLT due on the consideration paid.
