What Is A Partner's Share?

In a recent decision, the Court of Appeal had to consider the basis for the value of a partner's share in the partnership.

The case concerned a partnership deed which provided for a partner's share to be bought out by the other partners but did not provide for how the share should be calculated. The deed also failed to set out a distinction between capital and assets.

The dispute therefore revolved around whether the partner's share was a share of the partnership's net assets including unrealised gains (i.e. to include an up-to-date value of the partnership's property) or excluding unrealised gains (i.e. ignoring any movement in the partnership's property value).

The court decided that the partner's share should include any unrealised gains. While these cases will turn on their own facts, this decision appears consistent with previous decisions where the basis for the share has not been expressly dealt with by agreement. In that situation, it seems likely that an