Section 409 — Income Tax Act 2007: Business successions between partnerships

Business successions between partnerships 409 1 This section applies if—

a a loan to which section 398 applies is made to an individual, b the partnership in question (“the old partnership”) is dissolved, c on its dissolution another partnership of which the individual is a member (“the new partnership”) is formed to carry on the whole or part of the undertaking carried on by the old partnership, and d interest payable on the loan for the period ending with the dissolution of the old partnership was eligible for relief (or would have been had any been payable).

2 This Chapter applies as if the old partnership and the new partnership were the same partnership.

3 Section 399(5) (salaried partners etc treated as partners) applies for the purposes of subsection (1)(c) as it applies for the purposes of section 399(2).