Readers’ forum: Does BADR apply on liquidated company?

We represented a husband and wife partnership which started trading in 1988. In March 1991 the property from which the partnership traded and had previously rented was purchased from the landlord solely in the husband’s name. In September 2000 when the partnership needed additional finance the ownership of the property was changed so it became owned 50/50 between the husband and wife. The loan and new loan were in joint names from this date.

On 1 April 2009 the partnership’s trade was transferred to a limited company excluding the property but from this date rent was paid by the company to the old partners but not a market rent. The husband and wife were also the beneficial owners of the shares in the new company 50/50.

In April 2012 the husband and wife transferred a third of each of their 50% interests in the property to the husband’s...