Partnerships/asset sharing ratios
01/01/1993
Query
Treatment of gains arising on changes in partnership asset-sharing ratios.
Decision
Occasions of charge arise on disposals between partners. A change in asset-sharing ratios involves a disposal/acquisition, most commonly on retirement of a partner or admission of a new partner. Where (1) no consideration is involved, (2) there is no revaluation of assets, (3) other than as partners, the individuals are not connected persons within the meaning of S.10 TCA 1997 (4) the transaction is a bona fide commercial arrangement not forming part of a tax avoidance scheme - no gain is triggered and a re-allocation of balance sheet values is acceptable.
Capital Gains Tax
Section 549, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:G.36