Capital connections

Until recently my client was a member of a mainly arable farming partnership that also had a small milking herd two farmhouses and some let cottages.

The partnership consisted of himself and his two brothers sharing capital and income profits equally.

Not being able to devote himself full-time to the farm and having outside interests my client retired from the partnership and was paid out in accordance with a formula set out in the partnership deed the latest version of which had been drawn up in 1988 following the death of their father who had previously also been a partner.

The relevant part of the deed specified that in these circumstance the partners would obtain an open-market valuation of the partnership land and assets and the retiring partner would then receive 80% of his relevant share (here one-third) of the open-market valuation.