Commentary

B7.506 Allocation of partnership gains

Business tax
Business tax | Commentary

B7.506 Allocation of partnership gains

Business tax | Commentary

B7.506 Allocation of partnership gains

On a disposal by the partnership of an asset, the proceeds are apportioned between the partners by reference to the ratio of their respective shares in asset surpluses at the date of disposal. In most cases this will be the same as the profit sharing ratio, but may differ if:

  1.  

    •     there is a specific provision in the partnership agreement

  2.  

    •     any special agreement is made outside the accounts, or

  3.  

    •     the surplus is treated in the partnership accounts in a particular way1

Similarly, a partner's allowable expenditure on the acquisition of an asset by the

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