Withdrawing capital from a partnership

Dawny

I have a question regarding partnerships and tax.

Two partners wish to withdraw their capital contribution and I understand that they can do this with no tax liability provided the sums taken out do not exceed the original investment.

However, one partner has contributed capital via companies that he is the shareholder, does the same principle apply? Should the moneys be repaid to the original company or can they go straight back to the partner?

Thank you for any comments!

MarieNoelle

How was the original investment recorded?

Dawny

From the partners, as capital. From the one partners companies, as intercompany loans.