MTT42010 - Particular entities and adjustments: Miscellaneous entities: Partnerships - Deemed continuity
In certain cases, the membership of a partnership can change, resulting in a new partnership. Legally, this may constitute the cessation of the existing partnership and the commencement of a new partnership.
Where certain conditions are met, the new partnership will be treated as continuation of the old partnership for MTT purposes, in accordance with section 232A of Finance (No.2) Act 2023.
Change of membership
For MTT purposes, a partnership is considered to be the same partnership even when there is a change of membership, as long as a person who was a member before the change remains a member after the change.
Membership of partnership renewed due to transfer of ownership interests
Where:
- ownership interests in a partnership are transferred to more than one individual or entity, and
- the result of this transfer is a partnership where none of the original partners are members,
the new partnership is treated as being the same partnership.
For this purpose, a transfer of ownership interests includes any series of transactions that have the effect of a transfer, such as the cancellation of interests and the issue of corresponding interests.
Partnership dissolved
If a partnership is otherwise dissolved, the partnership is treated as a continuing entity for the purpose of dealing with its rights and obligations under MTT, for all accounting periods up to dissolution.
For administration purposes, each person who was a partner of the partnership in the accounting period ending with the dissolution is treated as being a partner of that continuing entity.