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HMRC internal manual

Business Income Manual

Partnerships - computation and assessment: partner’s notional trade

S852 Income Tax (Trading and Other Income) Act 2005

For the purpose of computing individual partners’ Income Tax liabilities the share of trade profits allocated to each partner is treated as having been derived from a separate, ‘notional trade’, which that partner carries on alone.

If the partnership business comprises two or more trades, each partner will also have two or more notional trades.

This guidance and the guidance at BIM82260-BIM82330 applies only for the purposes of Income Tax. See CTM36500 onwards for guidance on corporate partners.