The following Tax practice note Produced in partnership with Charles Goddard of Rosetta Tax provides comprehensive and up to date legal information covering:
Partnerships are often used as vehicles for holding UK real estate. The forms of partnership used are generally limited partnerships (LPs) and limited liability partnerships (LLPs).
This Practice Note examines the direct tax (ie corporation tax, income tax and capital gains tax (CGT)) and annual tax on enveloped dwellings (ATED) treatment of a UK LP in a property context. For the purposes of this Practice Note, CGT refers to both capital gains tax and corporation tax on chargeable gains except where specified otherwise.
The direct tax treatment of an LLP in a property context is considered in Practice Note: Tax treatment of a UK limited liability partnership.
For circumstances in which contractual arrangements may create a partnership, see Practice Note: Property holding structures—direct tax treatment of contractual joint ownership.
The indirect tax (ie VAT and SDLT) treatment of a partnership differs from the direct tax treatment and is outside the scope of this Practice Note.
For further details, see Practice Notes:
Partnerships and VAT, and
SDLT and partnerships—general principles and ordinary transactions
A UK partnership, of any type, is generally treated as transparent for most direct tax purposes. This means that the partnership itself is not subject to tax; instead the partners are each subject to tax on their proportionate share of the income, profits or gains of the partnership as a separate calculation from their own income, profits or
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This Practice Note provides an introduction to intercreditor agreements and their key provisions. This Practice Note:•explains the purpose of having an intercreditor agreement and when an intercreditor agreement would be used instead of a deed of priority or subordination deed•provides links to
This Practice Note examines:•why negative pledge clauses are used in commercial transactions •the consequences of breaching negative pledge provisions•how negative pledges are viewed in the context of security and quasi-security, and•key considerations when drafting a negative pledge clauseWhere
A limited company that proposes to issue redeemable shares must comply with the provisions of the Companies Act 2006 (CA 2006).Why do companies issue redeemable shares?A company may wish to issue redeemable shares so that it has an alternative way to return surplus capital to shareholders without
Disposal and devolutionThe equity of redemption arises as soon as the mortgage is made. It is an interest in the land which the mortgagor can:•transfer, lease or mortgage inter vivos, or•by will (it passes on intestacy)No cloggingIt is a fundamental principle of a mortgage that there must be no clog
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