Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017

Transfer of partnership interest pursuant to tax avoidance arrangements

18 (1) This paragraph applies where—

(a) there is a transfer of a chargeable interest to a partnership (“the land transfer”);

(b) the land transfer falls within paragraph 13(1);

(c) there is subsequently a transfer of an interest in the partnership (“the partnership transfer”);

(d) the partnership transfer is made—

(i) if the land transfer falls within paragraph 13(1)(a) or (b), by the person who makes the land transfer;

(ii) if the land transfer falls within paragraph 13(1)(c), by the partner concerned;

(e) the partnership transfer is made pursuant to arrangements which are, or form part of, tax avoidance arrangements that were in place at the time of the land transfer;

(f) the partnership transfer is not (apart from this paragraph) a chargeable transaction.

(2) For the purposes of this Act, the partnership transfer—

(a) is taken to be a land transaction, and

(b) is a chargeable transaction.

(3) The partners are taken to be the buyers in the transaction.

(4) The chargeable consideration for the transaction is taken to be equal to a proportion of the market value, as at the date of the transaction, of the interest transferred by the land transfer.

(5) That proportion is—

(a) if the person making the partnership transfer is not a partner immediately after the partnership transfer, that person’s partnership share immediately before that transfer;

(b) if the person is a partner immediately after the partnership transfer, the difference between the person’s partnership share before and after that transfer.

(6) The partnership transfer and the land transfer are taken to be linked transactions.

(7) Paragraphs 9 to 11 (responsibility of partners) have effect in relation to the partnership transfer, but the responsible partners are—

(a) those who were partners immediately before the transfer and who remain partners after the transfer, and

(b) any person becoming a partner as a result of, or in connection with, the transfer.

(8) In this paragraph, “tax avoidance arrangements” has the meaning given by section 31.