Our Team


Is your practice prepared for the changes to IR35?

Significant changes to tax legislation IR35 are likely to come into force from April 2017. These changes have implications for any practice that engages workers, such as locums, through their own companies.

Here’s what you need to know:


Our Team


Are you liable for a ‘hidden retirement tax’?

If you’re a partner in a GP practice that owns its own premises, you may not be aware of the tax liability that could arise if you retain your share in the surgery when you retire.

Stamp Duty Land Tax (SDLT) was introduced in 2003 and is payable on the transfer of an interest in a property. Chargeable transfers include introducing and removing the surgery from a partnership. This is regardless of whether any changes in ownership need to be notified to the Land Registry or whether any of the other partners buy in or out.

The tax itself will form part of your self assessment meaning it is your responsibility to declare it, and can amount to almost 5% of the surgery market value.

Since it is increasingly common for GPs to retire from partnerships whilst retaining a share of the surgery, we estimate that many hundreds of GPs will, over time, have become liable to pay SDLT. Many may be unaware of this liability, but the consequences of non payment can be severe. In addition to any overdue tax HMRC will levy fines and interest, and if they consider that you have deliberately not paid will look back up to 20 years.

What is SDLT?

SDLT is a tax you need to pay if you buy an interest in property or land over a certain price in England, Wales or Northern Ireland. The current SDLT threshold is £150,000 for non-residential land and properties.

When do you need to pay SDLT?

You become liable for the tax when you:

  • buy a freehold property
  • buy a new or existing leasehold
  • transfer an interest in land or property, including transfers into and out of partnerships

Is there not a Partnership Exemption?

You may well have heard that there is an SDLT exemption for partnerships. Whilst it is true that most intra-partnership transfers are exempt, you need to be certain that every transaction qualifies. Introducing and removing a building to/from the partnership are certainly not exempt, and even transferring shares between partners can be chargeable if, for example, the surgery was recently introduced as a Partnership Asset.The key point to understand in order to determine any liability is whether or not the surgery is held as a Partnership Asset. If you retire with some or all of the Partnership Asset you will be treated as a purchaser for the purposes of SDLT.

How do you calculate the tax?

Unfortunately this is not simple. SDLT for partnerships is calculated very differently from ‘normal’ property transactions, and is not a straightforward percentage of the market value. The calculation can involve changes in income profit shares going back 13 years and requires specialist knowledge.

Think you may be liable?

If you are planning to retire soon and are considering holding onto your share of the surgery, SDLT is something that you should take into account in your financial planning. Given enough time, you can make plans which manage your liability.

If you are a retired Partner and think you may have a historic liability, please get in touch. The partnership SDLT team at DR Solicitors is one of the most experienced in the country, and can help you understand where you might stand in relation to this issue.

For more information, please contact Nils Christiansen on 01483 511555 or email n.christiansen@drsolicitors.com

Our Team


Bank Holidays – how to ensure all partners have a happy New Year

Most GP partners will have enjoyed some much needed time off over the Christmas and New Year period and it won’t be long before the next bank holiday arrives.   One question which we are frequently asked is how partnerships can fairly apportion bank holidays so that part time partners don’t miss out.

The challenge

Because the majority of bank holidays fall on a Monday or Friday, a part time partner who does not usually work on either or both of these days may feel they are unfairly ‘losing out’ on any benefits their full time partners receive in relation to bank holidays.

For example, in a job share where partner A works Monday and Tuesday, and partner B works Wednesday to Friday, in 2017 seven bank holidays will fall when partner A is scheduled to work, whilst only one bank holiday will fall on a day when partner B would otherwise be working.

So, how can you best manage this issue?

Your options

Because partners are not employees, there is no statutory right to paid bank holidays.  How you choose to deal with bank holidays is a commercial decision to be decided between the partners. However, to avoid a potential claim of discrimination, you should ensure that part time partners are treated no less favourably than full time partners and it is sensible to ensure that any scheme you do put in place is fair.

So, what are your options? 

  1. Pro rata entitlement – One route you can take is to add all holiday leave and bank holidays (based on a full time partner) together, then calculate the total leave entitlement pro rata, based on the number of days to be worked. Everyone then gets an equivalent total amount of leave but the problem is that the bank holidays are fixed days so part timers working on a Monday will have less discretion over their days off than those working on, say, a Wednesday.  If you regard this as a problem, you could come to an agreement whereby, for example, any partner forced to use more than a given percentage of their total leave allocation on bank holidays is given an additional day of paid leave.
  2. No adjustment – A less popular option, but one which is followed by some partnerships, is for there to be no adjustment at all for any part time partner. If a bank holiday falls when you are scheduled to work, then lucky you and bad luck if it doesn’t fall on your scheduled day!  The problem with this option is it may become hard to persuade part timers to work mid-week. 
  3. Profit Share adjustment – an alternative mechanism is to calculate profit shares based upon actual sessions scheduled to be worked. Since bank holidays are known in advance, the profit shares can be adjusted to account for them. This is a complicated option leading to small annual changes in profit shares and is, therefore, unusual.


Whichever option you choose, the most important thing is to ensure that it is clearly set out in your partnership deed and, of course, that your partnership deed is up to date and valid.  Older partnership deeds, in particular, tend not to cater well for part time partners.

Without a valid partnership deed, there will be no formal entitlement to leave of any kind and no clarity – for example, on what you will earn when you are absent, or who should pay for locum cover.

Our handy checklist 8 signs that your Partnership Deed needs an update may help you decide if it’s time to update your old deed.

Our recommendations

In our experience, rolling all holiday leave and bank holidays together to generate a pro rata entitlement can work well.  However, as we’ve already mentioned, ultimately it is a commercial decision that needs to be taken by partners working in the best interests of the practice.

For more information about partnership deeds, or for any other enquiries, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com