Readers’ forum: Is business property relief available?

My clients three connected individuals are in partnership farming land the freehold of which is owned by the partnership. Most of the income relates to grants and grazing. It is likely that some of the property will fetch a large sum when it is sold for development.

The partnership agreement provides that on leaving the partnership the outgoing partner shall be paid the amount of his capital account based on the balance sheet drawn up at the next accounting date. He is not entitled to any share or interest in the property of the partnership or net profits arising after his leaving date. One of the partners has died; his CGT base cost for the land is less than the balance sheet value (and less than market value).

HMRC’s Capital Gains Manual states (CG30360) that interests in partnership assets are not included for the purposes of...