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HMRC internal manual

Business Leasing Manual

From
HM Revenue & Customs
Updated
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Sale of lessor companies and similar arrangements: partnerships: identifying a ‘qualifying change’

Section 415 CTA2010

In most circumstances it will be easy to see when there is a qualifying change in a partner’s share in the profits or losses of the business.

The relevant percentage share is the percentage share in the profits or losses of the business for tax purposes. Typically the allocation of profits or losses will be on a simple percentage basis so that a partner will be entitled to, say, 50% of all profits or losses. If a partner entitled to 50% of the profits or losses agrees to take only a 10% share there will be a fall of 40% ,this is a qualifying change. If a partner entitled to 50% of the profits or losses decides to leave the partnership then there will be a fall of 50%, this is a qualifying change.