A+B are partners in an English LP. The sole asset of the LP is membership of a trading LLP. The question is whether (all other period/trading criteria being met) can A+B benefit from BPR on their LP interest? It comes down to whether the LP can be said to be trading or is in the business of holding investments (the membership of the LLP).
The situation is relatively rare which I presume is why it seems to be overlooked by textbooks, IHTM and the 2014 Technical Release. The alternative is that they do not mention it because the answer is so obvious…
I draw hope from Example 8 of the Technical Release, where a company was considered to be trading because it was a member of a trading LLP. On that basis, it seems to follow that an LP member of an LLP would also be trading. However, there’s a lingering concern that HMRC may have been making it up on the fly so will not feel bound by principle on different facts.