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HMRC internal manual

Business Income Manual

Partnerships - computation and assessment: profits and losses computed at partnership level

S849 Income Tax (Trading and Other Income) Act 2005, S1259 Corporation Tax Act 2009

Where any of the members of a partnership are chargeable to Income Tax the partnership is required to compute the trade profits of any period of account using the Income Tax rules as they apply to individuals.

The computation is made as if the partnership were an individual resident in the UK. But if the partnership contains a non-resident individual, or a company, then additional computations may be required - see BIM82235.

Capital allowances are claimed by the partnership and computed at the partnership level and are given as an expense in computing the amount of the partnership’s profits. Therefore the profits allocated to each partner are the profits net of capital allowances. See BIM82215 for further guidance.