In SC Properties Limited and Richard Cooke v HMRC [2022] TC08537, the First Tier Tribunal (FTT) decided a property was sold by individuals not a partnership. As no partnership existed any CGT and SDLT relief that was claimed on its disposal was denied.

  • Mr and Mrs Cooke (the Appellants) acquired a farm in 1989.
  • SC Properties Limited (SCP) was incorporated by the Appellants in 1997 to develop properties.
  • In September 2014, planning permission was obtained for the development of a property on the farm called Marepond Copse (MC).
  • The Appellants claimed that they owned MC in partnership from September 2014.
  • SCP was engaged to complete the development and engaged a third-party builder to complete the works.
  • The property was transferred to SCP as part of an option agreement granted by the Appellants, contracts were exchanged in April 2016.
  • The Appellants personally claimed Capital Gains Tax (CGT) relief on the appropriation of the property which had previously been held as an investment to trading stock.
  • An election was made to defer the profit on the sale of the property by the Appellants to the company.
  • The Appellants claimed Stamp Duty Land Tax (SDLT) relief under the Partnership SDLT provisions.
  • The partnership was registered in February 2019.
  • HMRC inquired into the self-assessment and SDLT returns claiming that No partnership existed.
  • Closure notices were issued on the basis that as no partnership existed, the claimed reliefs were not therefore available.
  • The taxpayers Appeal to the FTT.

The FTT found that:

  • The three conditions for a partnership to be in existence were not met:
    • There was no business:
      • Other than the assertion of the appellants, no evidence was provided to suggest commercial relationships had been entered into by the partnership; there were no invoices or contracts for the sizeable development in the partnership's name.
      • The partnership did not have its own bank account or register for VAT.
    • The business was not carried on by two (or more) persons.
      • That the partnership was between husband and wife did not mean that the usual formalities could be ignored.
      • It was difficult to accept the Appellants were acting in common as no evidence was provided to confirm Mrs Cooke’s understanding of the arrangements.
      • None of the documentation (financing and option agreements) made reference to the existence of a partnership.
      • Although partnership tax returns and accounts were prepared, these were 'self-serving documents' and cannot be treated as independent evidence of the existence of the partnership.
      • The evidence of the partnership start date was confused.
    • The business was not carried on with a view to profit.
      • The evidence suggested the intention was that the profit accrued to SCP not the partnership, evidenced by the grant of the option which effectively moved profits to SCP.
  • As no partnership existed, the elections made were invalid and the partnership SDLT provisions do not apply.

The appeal was dismissed.


This case highlights that implementation is vital when undertaking a tax planning exercise. Failing to ensure that documents are drafted to reflect the intentions of the parties can cause the relief to be missed.

Useful guides on this topic

When does a partnership exist?
When does a partnership exist? Why does it matter? What are the implications for different taxes?

Partnership agreements: What should be considered
Partnership agreements can be invaluable to clarify everyday matters and settle disputes within a partnership. What sort of things should be discussed for inclusion in a partnership agreement? Why are they important?

Buy-to-let: SDLT on partnership incorporation
What are the Stamp Duty Land Tax (SDLT) implications of incorporating my property partnership? Are there any reliefs available? When do the anti-avoidance rules in s.75A-75C Finance Act 2003 apply to partnerships?

How to appeal an HMRC decision
Disagree with an HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

SC Properties Limited and Richard Cooke v HMRC [2022] TC08537

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