If a liquidators appointed partnership does this trigger SDLT charge?

[James S]

An LLP holds a property which was transferred in, taking advantage of Sch 15, so no SDLT payable. If a liquidator is appointed and the asset distributed out within 3 years of the transfer, does this trigger an SDLT charge under para 17A?

Sergeant & Sims says:
A ‘qualifying event’ includes a withdrawal from the partnership of money or money’s worth which does not
represent income profit by the relevant person withdrawing capital from his capital account. The question
arises does a distribution of assets from a partnership on dissolution constitute a ‘withdrawal’ for the
purposes of paragraph 17A? In the opinion of the author, the answer is no. A ‘withdrawal’ is not a term that is
apt to describe a distribution on dissolution. As a matter of language, a ‘withdrawal’ is an act of the person
withdrawing, in this context the partner, whereas a distribution is an act of the partnership. The context in
which the word appears in paragraph 17A also implies strongly that the partnership from which money or
money’s worth is withdrawn continues to exist (and hold the property), which is not, of course, the case on a
dissolution.

Any other views would be appreciated.

[Patrick]

I tend to agree with Sergeant on this one.

[Author]

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