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A husband and wife purchased five acres of land with 'hope' value in 1986 at a cost to them of £100,000. This land has been held as the partnership's only trading stock and a partnership tax return has then been submitted annually for this property development business.
Their daughter, C, was admitted as a one-third partner in 1990 upon reaching the age of 18. C's name was not, however, added to the land deeds. All partners are UK-resident, domiciled and higher-rate taxpayers. And they are all involved in several other unrelated trading partnerships.
A husband and wife purchased five acres of land with 'hope' value in 1986 at a cost to them of £100 000. This land has been held as the partnership's only trading stock and a partnership tax return has then been submitted annually for this property development business.
Their daughter C was admitted as a one-third partner in 1990 upon reaching the age of 18. C's name was not however added to the land deeds. All partners are UK-resident domiciled and higher-rate taxpayers. And they are all involved in several other unrelated trading partnerships.
Over the years significant costs have been incurred in relation to the land as follows.
- Bank interest and charges: £200 000
- Drainage/remedial works and installation of basic services on site: £150 000
- Professional fees paid to advisers for planning applications/appeals etc: £200 000
From the outset ...
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