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HMRC internal manual

Business Income Manual

Partnerships - computation and assessment: claims and elections affecting partnership profits

S42(6),(7) Taxes Management Act 1970 (TMA 1970)

Claims and elections which affect the computation of partnership profits and losses must be made by the partnership in the partnership return.

This includes all claims and elections relating to capital allowances. Capital allowances are given as an expense in computing the partnership profits. Individual partners cannot make supplementary claims in respect of expenditure they have incurred personally. The exception to this rule is where there is a formal leasing agreement between the partner and the partnership. In these circumstances relief for the capital allowances due is to be given against the partner’s leasing income - see BIM82220.

The claims and elections which must be included in the partnership return are listed at S42(7) TMA 1970.