Taxation of Chargeable Gains Act 1992 section 59

Partnerships

Section 59 establishes that partnerships are treated as transparent for capital gains tax purposes, so that each partner is taxed individually on their share of gains from partnership asset disposals, and prevents double taxation agreements from sheltering UK-resident partners from tax on their share of an overseas partnership's chargeable gains.

• Partnerships are fiscally transparent for capital gains purposes — tax on chargeable gains from disposing of partnership assets is assessed and charged on each partner separately, not on the firm itself.
• All partnership dealings are treated as dealings by the individual partners, meaning each partner must report their own share of any gains or losses arising on disposals of partnership assets.
• Where a partnership is resident outside the UK or is controlled and managed abroad, any relief from UK capital gains tax or corporation tax provided by a double taxation agreement does not reduce a UK-resident partner's liability on their share of the partnership's chargeable gains.
• The definition of a partnership member for these purposes is broad — it includes any person who is entitled to a share of the partnership's chargeable gains, even if they might not be a partner in the traditional sense.