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Partnerships

Where one or more of the partners in a partnership is a company and one or more of the partners is not, two separate computations of the partnership profits have to be made, one using income tax rules and one using corporation tax rules (see D7.401). Where a money debt is owed by or to the partnership, no debits or credits in relation to that debt (or any loan relationship arising from it) are brought into the partnership corporation tax computation¹.

Instead, each company partner is required to bring its share of the debits and credits arising on the partnership's loan relationships and other money debts into account in computing its loan relationship profits. Each company partner's share of the debits and credits arising on the partnership's loan relationships and other money debts is calculated²:

1. Ìý

   •ÌýÌýÌýÌý on the assumption that the company were a party to the loan relationships and other money debts in its own right and