Readers' forum : Partnership, or not?

My clients a brother and sister jointly own some land which is let on a commercial basis. They act jointly in all matters and a set of accounts for the undertaking is drawn up every year. Nevertheless they do not complete a partnership return and all income is declared as joint property income on their individual tax returns. However the land is subject to an option to tax and for VAT purposes a partnership exists. The VAT registration and returns are made on that basis.

My clients now wish to place this land within a corporate wrapper and ideally would like to take advantage of the stamp duty land tax exemption in FA 2003 Sch 15 paras 18 to 20 that applies to transfers from partnerships into connected companies. Although no income tax partnership has been declared is a VAT...