If there are any partnership articles you should check them for
any provisions which say how the value of a partnership share is to
be calculated on the death of a partner.
If the articles do not provide for the death of a partner or they state that the value of the deceased's share is to be calculated by reference to open market values, then the open market value of the deceased partner's share is required, IHTA84/S160.
The articles may contain provisions restricting a partner's ability to dispose of his share as he wishes. Such a restriction is called a "fetter" ( IHTM25120).
The open market value of the partner’s share is also required where there are no partnership articles. In this case the Partnership Act 1890 provides that the partnership is dissolved on a partner's death, so the deceased's personal representative ( IHTM05012) is entitled to be paid the value of his share (in practice the other partners may pay over the value of the deceased's share and continue to run the business).