Readers’ forum: Tax consequences for LLP that owns property

A few of a client’s family members (father mother two daughters and uncle) pool their individual properties to form an LLP for carrying on a rental business. Their share of the partnership is based on the market value of the properties transferred (20% each). This is credited to their capital account and they share the partnership profits on this basis. What would be the capital gains tax consequence on the transfer to the LLP on the basis that they retain the share of interest based on the market value transferred?

The father and uncle have since gifted 5% of their LLP interest to the two daughters after a year. The new share arrangement is now father 15% mother 20% uncle 15% with the two daughters each of 25%. What is the tax consequence of the gift of their LLP’s share by the uncle and the...