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HMRC internal manual

Capital Gains Manual

Partnerships: partnership assets and partners' interest in partnership: Fractional interests in partnership assets acquired in stages: SP D12: Section 11

Section 11 SP D12

Where partners acquire their fractional interests in partnership assets in stages over a period of time the acquisition costs are pooled.


X was admitted to a partnership in Year 1 at which time he acquired a 20% interest in goodwill. His interest in goodwill was increased in subsequent years:

Year 1 20% cost £100,000
Year 3 10% cost £50,000
Year 5 5% cost £35,000


The base cost of Partner X’s 35% interest in goodwill for CG purposes is £185,000.


Any subsequent reduction in Partner X’s interest in goodwill will be treated as a part-disposal out of the pooled expenditure.