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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Statutory rules, Statements of Practice and SA Returns

Statutory rules: TCGA92/S59

TCGA92/S59 (1) sets out the CG rules for partnerships. It provides that:

where two or more persons carry on a trade or business in partnership -

  • any CGT or CT on chargeable gains due on a disposal of a partnership asset is charged on the partners separately


  • any acquisition or disposal of a partnership asset is treated as made by the partners and not by the partnership.

This means that partnerships are treated as ‘transparent’ for CG purposes and that each of the partners is responsible for returning any gains or losses arising on disposals of their interests in partnership assets.

TCGA92/S59 (2) - (4) apply where a person resident in the UK is a member of a partnership which is resident outside the UK or which carries on a trade, profession or business which is controlled or managed outside the UK, see CG11000+.

Statements of Practice D12, 1/79 and 1/89

In addition to the statutory rules in TCGA92/S59 there are a number of Statements of Practice relating to CG and partnerships. Statements of Practice explain the way HMRC applies the legislation in practice but they do not affect taxpayers’ rights of appeal.

SP D12 sets out a number of points of general practice in respect of CG and partnerships. The main points covered by SP D12 are summarised in CG27150 and the full text is reproduced in CG27170.

SP1/79 and SP1/89 extend the practices described in SP D12.

SP1/79 extends the practice described in paragraph 8 of SP D12 in certain situations where a lump sum is paid to a retired partner in addition to an annuity. The text is reproduced in CG28420. Guidance on annuities is given in CG28400.

SP1/89 deals with rebasing and indexation. Guidance on the operation of SP1/89 is given at CG28140 and CG28330.

Self Assessment Returns

A partnership is required to complete the Chargeable Assets Pages of a Partnership Tax Return for any tax year in which it disposed of a chargeable asset.

Partners are responsible for returning chargeable gains arising on disposals of part or all or their interests in partnership assets on the CG Pages of their Self Assessment Returns.

CG10340 onwards gives further information about Self Assessment Returns.