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HMRC internal manual

Capital Gains Manual

Transfer of a partnership business and CG reliefs: entrepreneurs’ relief, “roll-over” relief and gift “holdover” relief: SP D12: Section 14

Entrepreneurs’ relief

An individual may qualify for entrepreneurs’ relief (TCGA92/S169H) when their business becomes a partnership.  A partner may also qualify for entrepreneurs’ relief when there is a disposal of part or all of the partnership business.

A partner may qualify for entrepreneurs’ relief (subject to the normal conditions) when he disposes of all or part of a fractional share in shares which are held as partnership assets.

Guidance on entrepreneurs’ relief in relation to partnerships is at CG66040.

“Roll-over” relief

Roll-over” relief (TCGA92/S152) may be available to a partner where there is a disposal of a partnership asset and the proceeds are re-invested in another asset which is also used for trade purposes.

Guidance on “roll-over” relief in relation to partnerships is at CG61150.

“Roll-over” relief on transfer of a business

“Roll-over” relief on transfer of a business (commonly called “incorporation” relief) is available to a partner where the whole of the partnership business is transferred to a company as a going concern, in exchange for shares (TCGA92/S162).

Guidance on “incorporation” relief is at CG65700.

Gift “holdover” relief

“Holdover” relief for gifts of business assets (TCGA92/S165) is available to a partner, in a partnership that is transparent for tax purposes (CG27000), when the partner disposes of a share in a partnership assets (subject to the normal conditions for this relief). 

Guidance on gift “holdover” relief is at CG66880.

Partnership Manual

There is more information on the capital gains reliefs available to partners in PM60220.