Land Transaction Tax relief for incorporation of limited liability partnerships: technical guidance

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LTTA/7034 Relief for incorporation of limited liability partnerships

(Schedule 12)

Where the following 3 conditions are met, relief from LTT may be claimed on a land transaction which transfers a chargeable interest from a person (the transferor) to a limited liability partnership in connection with its incorporation.

A limited liability partnership means one formed under the Limited Liability Partnerships Act 2000. It should be noted that the transitional provisions contained in Schedule 2 to the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 ensure that a limited liability partnership incorporated under the Limited Liability Partnerships (Northern Ireland) Act 2002 is to be treated as if it was incorporated under the Limited Liability Partnership Act 2000.

The 3 conditions are:

• condition A – that the effective date of the land transaction is within the period of one year from the date of incorporation of the limited liability partnership
• condition B – that at the relevant time the seller:
  • is a partner in a partnership comprised of all the persons who are (or are to be) members of the limited liability partnership (and no-one else), or
  • holds the chargeable interest transferred as nominee or bare trustee for one or more or the partners in such a partnership
• condition C – that the proportions of the interests held by the partners:
  • are the same both before and after the transaction, or
  • where they are different, the differences have not arisen as part of a scheme or arrangement the main purpose (or one of the main purposes) of which, is the avoidance of liability to any duty or tax

For the purposes of this relief ‘relevant time’ means:

• if the transferor acquired the chargeable interest after the partnership was incorporated, the time immediately after they acquired that chargeable interest, or 
• otherwise, immediately before the partnership was incorporated