Readers’ forum: Property partnership

I have a client who wishes to transfer a commercial property he is in the process of buying to a property partnership consisting of himself his wife and his adult son.

Under the terms of the partnership agreement he will be entitled to 98% of any capital growth and will bear 98% of any capital losses which arise. His wife and son will each have 1% of capital growth or losses. However rental income/losses will be allocated 98% to the son and 1% each to the client and his wife. Partnership accounts will accordingly be prepared annually on this basis.

However I am not convinced that a partnership could be justified on this basis since it is more in the nature of a joint property ownership situation with no additional services provided.

I am aware that such structures have previously been recommended...