This note explains the general rules surrounding the inheritance tax (IHT) implications of being a partner in an English general partnership. Different rules may apply to Scottish partnerships, see Simon's Taxes I6.201.

As a partnership is transparent for tax purposes, the inheritance tax rules are applied to each partner in accordance with their individual circumstances and their interest in the partnership and its assets.

See also the following guidance notes:

1. •

   Practical tips for securing BPR as a 'trading business' for practical IHT planning points for partnership agreements.

2. •

   Interaction of APR and BPR for farming partnerships

3. •

   BPR ― the value of the business which sets out details of valuing partnership interests for IHT purposes