This section considers SP D12, para. 4: Changes in partnership sharing ratios.

Whenever there is a change in partnership asset-sharing ratios, for example on the admission or retirement of a partner, there is a potential charge to capital gains tax, subject to possible roll-over relief (see ¶287-365). A partner increasing his share is treated as having made an acquisition of a corresponding share of each asset owned by the partnership; similarly, a partner reducing his share is deemed to have disposed of a corresponding share of each of the partnership assets.

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