Income Tax Act 2007 section 564W

Diminishing shared ownership arrangements not partnerships

Section 564W confirms that diminishing shared ownership arrangements are not to be treated as partnerships for income tax purposes.

• Diminishing shared ownership arrangements involve a financial institution and a customer jointly purchasing an asset, with the customer gradually buying out the institution's share over time.
• Despite the shared ownership structure, these arrangements are explicitly excluded from being classified as a partnership under the Income Tax Acts.
• This ensures that the specific alternative finance rules apply to these arrangements rather than the general partnership tax rules.
• A corresponding rule for corporation tax exists separately under section 515 of the Corporation Tax Act 2009.