Finance Act, 1994
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Amendment of section 46 (limited partnerships) of Finance Act, 1986. |
29.—(1) Section 46 (as amended by section 23 of the Finance Act, 1992 ) of the Finance Act, 1986 , is hereby amended by the addition after subsection (5) of the following subsection: | |
“(6) For the purposes of this section, where in connection with the making of a contribution to a partnership trade by a general partner in the partnership— | ||
(a) there exists any agreement, arrangement, scheme or understanding under which the partner is required to cease to be a partner in the partnership at any time before the partner is entitled to receive back from the partnership the full amount of the partner's contribution to the trade, or | ||
(b) by virtue of any agreement, arrangement, scheme or understanding— | ||
(i) any asset owned by the partner is exempt from execution upon goods or from a process or mode of enforcement of a debt of the partner or the partnership, or | ||
(ii) any other limit or restriction is placed on the creditor's entitlement to recover any such debt from the partner, | ||
the partner shall be treated as a person who is not entitled to take part in the management of the trade and who is entitled to have the person's liabilities, or the person's liabilities beyond a certain limit, for debts or obligations, incurred for the purposes of the trade, discharged or reimbursed by some other person.”. | ||
(2) (a) This section shall apply and have effect, in relation to an amount given or allowed under any of the specified provisions (within the meaning of section 46 of the Finance Act, 1986 ) as respects a contribution (within the meaning of that section) by a partner to the trade of the partnership which is made on or after the 11th day of April, 1994. | ||
(b) In determining whether an amount is given or allowed under any of the specified provisions (within the meaning of section 46 of the Finance Act, 1986 ) as respects a contribution to a trade (within the meaning of that section) on or after the 11th day of April, 1994, any amount which would not otherwise have been given or allowed by virtue of that section but for a contribution to a trade on or after the said date and on the basis that paragraph (a) had not been enacted, shall be treated as given or allowed as respects such a contribution. |