Corporation Tax Act 2010 section 756

Partnership shares

Section 756 explains how a change in a partner's share of partnership profits or losses is treated as a transfer of partnership property for the purposes of the income stream transfer rules.

• When a partner's share in the profits or losses of a partnership is reduced, and this reduction amounts to a transfer of a right to receive income, it falls within the income stream transfer rules.
• The reduction in the partner's profit or loss share is treated as a consequence of transferring an underlying asset — namely, the partnership property from which the right to that income arose.
• This provision ensures that partnership profit-sharing arrangements cannot be used to sidestep the corporation tax rules on transfers of income streams.
• The section forms part of a broader group of provisions (sections 752 to 757) that deal with the taxation of transferred income streams, including interpretation rules and exceptions such as transfers by way of security.