Stamp duty and SDRT on transfers of interests in private equity partnerships
Produced in partnership with Emily Clark of Travers Smith
Stamp duty and SDRT on transfers of interests in private equity partnerships

The following Tax guidance note Produced in partnership with Emily Clark of Travers Smith provides comprehensive and up to date legal information covering:

  • Stamp duty and SDRT on transfers of interests in private equity partnerships
  • Transfer of an interest in a private equity partnership
  • Stamp duty—is a transfer of a partnership interest stampable?
  • Calculation of stamp duty
  • Stamp duty—what are the consequences of not stamping?
  • Inadmissibility as evidence
  • Available for 'any purpose whatsoever'
  • Interest and penalties
  • Stamp duty—does it matter whether the partnership is a UK partnership or a foreign partnership?
  • Stamp duty reserve tax

This Practice Note considers the application of stamp duty and stamp duty reserve tax (SDRT) to the transfer of interests in private equity partnerships.

The UK levies three types of transfer tax:

  1. stamp duty

  2. stamp duty reserve tax, and

  3. stamp duty land tax (SDLT)

Although stamp duty and SDRT are separate regimes (SDRT is a mandatory code whereas stamp duty is not) the rules overlap in their application.

This note covers:

  1. the stamp duty rules, and, in particular:

    1. whether the transfer of a partnership interest is stampable

    2. how stamp duty is calculated

    3. the consequences of not stamping, and

    4. whether it matters if the partnership is a UK partnership or a foreign partnership, and

  2. secondly, whether or not the SDRT rules apply to partnership transfers

It does not consider:

  1. the complex rules relating to SDLT and partnerships (see Practice Note: SDLT and partnerships—general principles and ordinary transactions), or

  2. the application of stamp taxes to transfers of interests in limited liability partnerships (LLPs)

Transfer of an interest in a private equity partnership

The transfer of an interest in a private equity partnership may occur, for example, when:

  1. a departing employee transfers their interest in a carried interest partnership pursuant to its leaver provisions, or

  2. an investor decides to sell its interest in a private equity fund in the expanding secondary market

It is important to note