Section 9 of SP D12 explains the treatment of annuities paid to retired partners. Statement of Practice 1/79 (SP1/79) applies where a lump sum is paid in addition to an annuity.

Annuities purchased for retired partners by a partnership

The cost of an annuity payable by an assurance company represents consideration in the form of money's worth paid by the remaining partners for the acquisition of the retiring partner's fractional interest in the partnership assets.

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