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My clients are two brothers who acquired a freehold property in February 1999 for £250,000 and commenced trading from it in partnership. There is no formal partnership agreement, but initially they agreed to share the profits 75% to brother A and 25% to brother B. In April 2000, the profit sharing ratio was changed to 2:1 (A to B) and remains so to date.
My clients are two brothers who acquired a freehold property in February 1999 for £250 000 and commenced trading from it in partnership. There is no formal partnership agreement but initially they agreed to share the profits 75% to brother A and 25% to brother B. In April 2000 the profit sharing ratio was changed to 2:1 (A to B) and remains so to date.
Brother B now wishes to leave the partnership to concentrate on other business interests and has offered to sell his share in the partnership to brother A for £300 000. The balance on B's capital account is £150 000 consisting wholly of retained profits and the freehold property has been valued at £800 000. The brothers agree that B has a 25% share of the property but there is nothing in writing.
What value is used for...
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