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Partnership trading profits/losses

B7.401 Calculation of partnership trading profit or loss

The starting point for computing partnership profits or losses is the result for the relevant accounting period shown in the partnership accounts. The calculation of the tax-adjusted profit or loss for the partnership is then computed in accordance with the general rules that apply for all trades (see Division B2.1 onwards) and, for corporate partners, for all companies (see Division D1.3). The main issue relevant to partnerships is that certain items relating to the partners have to be removed, see more details below.

When calculating the profits of the trade no account is taken of losses for another period¹.

Depending on the status of the partners, it may be necessary to prepare more than one computation of the profits/losses. For example if one partner is an individual and another is a company, the trading profits will need to be prepared under both the income tax provisions² and corporate