| Commentary

35.3 Capital gains tax

| Commentary

35.3 Capital gains tax

Whether the partner is disposing of his share of the partnership business on sale or winding up, or on leaving an ongoing partnership, he will be treated as disposing of his fractional share of any chargeable assets forming part of the business, and this will give rise to capital gains tax implications in the usual way1. The calculation of the gain will be made according to the usual rules2 with market value being substituted for the proceeds of sale if the outgoing partner is making a gift of the assets, for example to a son or daughter3. As with the position of the sole trader4, the most important capital gains tax relief for a partner disposing of his share in the partnership whether by sale or gift used to be taper relief. This was because any chargeable assets would be treated as business assets and

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