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HMRC internal manual

Capital Allowances Manual

PMA: Partnerships and successions: Partnerships


Ignore a change in the persons carrying on a qualifying activity carried on in partnership (a partnership change) for PMA purposes unless:

  • the old and new partnerships have no-one in common, or
  • the qualifying activity is treated by ITTOIA/S18 or ITTOIA/S362 as permanently ceasing to be carried on by a company, or
  • the qualifying activity is treated as discontinued under CTA09/ S41 (2), Sch 1 para 519 (3) ( formerly ICTA88/S337 (1)).


So where there is a partnership of individuals you ignore a partnership change for PMA purposes if there is at least one person who is a member of both the old and new partnerships.

This does not apply where the qualifying activity is an office or employment.

The disposal value of an asset sold after the partnership change is restricted to the qualifying expenditure incurred on it whether or not it was acquired before the partnership change.

Example Graham and Martin run a business. They buy a word processor for use in the business for £20,000. They take John into the partnership. The partnership of Graham, Martin and John sells the word processor. The limit on their disposal value is £20,000, the price paid by Graham and Martin.