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HMRC internal manual

Stamp Duty Land Tax Manual

Special provisions relating to partnerships: Definitions

A chargeable interest is partnership property for SDLT purposes if:

  • it is held by or on behalf of the partnership, or by the members of the partnership, and
  • it is held for the purposes of the partnership business

These two tests must both be satisfied in order for a chargeable interest to be partnership property. Each is a question of fact. Often there will be an agreement between the partners which will put the position beyond doubt.

In practice, whether a chargeable interest is partnership property or not for SDLT purposes will be decided by reference to whether it is partnership property by virtue of section 20 of the Partnership Act 1890. So a chargeable interest acquired, whether by purchase or otherwise, on account of the firm or for the purposes and in the course of the partnership business, will be partnership property for SDLT purposes.

The mere fact that a business is carried on in property belonging to one or more partners does not make that partner’s chargeable interest partnership property. Where a chargeable interest is owned by all the partners whether it is partnership property depends on the basis on which it is held by the co-owners.

It is unlikely (in England & Wales and Northern Ireland) that a chargeable interest in which the equitable interests were subject to an express declaration of joint tenancy on acquisition is partnership property unless there is clear evidence of a change of intention to bring the chargeable interest in as an asset of the partnership business.

There is further guidance on the definition of partnership property in the Business Income Manual at BIM72058