Partnership dissolution and estate duty: a deceased partner's share in net assets is treated as movable property, not specific immovable property.

On dissolution of a partnership firm, a partner is entitled only to a share in the net partnership assets after realisation and discharge of liabilities, not to any specific asset. The partner's entitlement is ascertained as at the date of dissolution, and even an allotment of immovable property in final division is treated as satisfaction of that share rather than conferral of a proprietary interest in that property. Rule 7 governing a partner's share in an existing partnership did not change the character of the deceased partner's entitlement in a dissolved firm. The deceased partner's share was therefore treated as movable property for Estate Duty Act purposes, and the question was answered against the accountable person.

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Issues: Whether the deceased partner's share in the assets of a dissolved partnership, including immovable property, was to be treated as movable property for the purposes of the Estate Duty Act, 1953.

Analysis: On dissolution of a firm, a partner is not entitled to any specific asset of the partnership but only to his share in the net partnership assets after realization and discharge of liabilities. The share is ascertained with reference to the date of dissolution, and even an allotment of immovable property in final division is treated as received in satisfaction of that share. Rule 7 governing a partner's share in an existing partnership did not alter the legal character of the deceased's entitlement in the dissolved firm. The decision treated the partner's right as a right to a proportion of the realized assets rather than a proprietary interest in any particular immovable property.

Conclusion: The deceased partner's share was correctly treated as movable property, and the question was answered against the accountable person.

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