LLPs treatment for IHT and CGT purposes

Three siblings, A,B and C transfer a valuable piece of land to an LLP of which they and their spouses are equal partners.

Do members agree there is no IHT worry, as A,B and C will own a 1/6 share each (so no loss to their estates) and the “gifts” to their spouses are spouse exempt?

Likewise, there is no chargeable disposal for CGT purposes.

Simon Northcott

How do you show that A’s wife receives her share entirely from A rather than from A, B and C. Could there be a risk that A is treated as transferring 1/6th of his share to his spouse and a further 1/6th to each of B’s and C’s spouses? B and C are treated the same way.

You could avoid this by each transferring 50% of their respective interests to their wives first - and the six then collectively transfer the land to the LLP.

Andrew Goodman
Osborne Clarke LLP