Property partnerships

Produced by Tolley in association with of Crane Dale Tax, part of AMS Group

Owner-Managed Businesses

Guidance

Property partnership or joint ownership?

A fundamental point in the context of property partnerships is whether the business really is a partnership, or falls short as the joint letting of property.

Joint ownership of property alone does not mean that the letting activity will constitute a partnership. Instead, this will depend more on whether the letting itself is carried on in partnership. In fact, general law partnerships are not partnerships if all they do is carry out investment activities, as one of the definitions of being in partnership is that the partners are in business together. Therefore, it will often automatically be the case that joint property ownership arrangements fall short of the degree of business involvement needed to be regarded as in partnership.

Normally, simple joint ownership will not be treated as a partnership and the taxpayer’s share of the income and expenditure from the jointly owned property will simply be included as part of their personal rental business. Indeed, it can often be beneficial to treat the income

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Rob Durrant-Walker

Tax Director at Crane Dale Tax , Corporate Tax, OMB, Personal Tax

Rob is a cross-tax advisor with a particular focus on property tax planning, and business structure planning for OMB’s. He provides tax advice to other accounting firms, balancing commerciality, ethics, and understanding complexity. His 30+ years of experience start at the Inland Revenue in Hull. After completing his ATT and CTA by 1999 with PKF, he subsequently worked at KPMG and UHY prior to managing the business tax team as a director at Garbutt + Elliott. Rob is now Tax Director at the independent tax consultancy, Crane Dale Tax. He is a regular author for Taxation magazine with many articles and Readers Forum contributions since 2005, and he contributes as a virtual member to the CIOT Property Tax technical committee. Rob works remotely from Vancouver in Canada.

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