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Insight

Budget 2015 - Entrepreneurs' Relief - Companies in Partnership

Entrepreneurs’ relief (“ER”), where it applies, provides an effective 10% rate of CGT on disposals on the first £10m of lifetime gains.As one of a number of measures announced in the Budget in Entrepreneurs’ relief (“ER”), where it applies, provides an effective 10% rate of CGT on disposals on the first £10m of lifetime gains.

As one of a number of measures announced in the Budget in connection with ER, companies that are members of a trading partnership will no longer be able to count a portion of the partnership's trade as if it was their own (and so non-trading partner companies will no longer be able to look to the underlying partnership so as to be treated as trading for ER purposes).  This is allied to the changes repealing the joint venture rules concerning ER and companies holding interests in JVs, which is discussed in another of my blogs.

As a result, the usual assumption that a partnership is transparent for tax purposes should no longer be made in the ER context without a careful review of the exact ownership structure.

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