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HMRC internal manual

Company Taxation Manual

Particular topics: companies in partnership: investment partnerships: procedures for

The HMRC office dealing with the general partner should normally also take responsibility for the investment partnership.  That office should issue the partnership with a partnership return.

Any enquiry into the partnership return should be undertaken with a view to confirming the partnership’s taxable profit or allowable loss for each relevant class of income and the allocation of those amounts among the partners in accordance with the partnership agreement.  In making those calculations the rules set out at CTM36510 to CTM36540 will apply.

Any claim by a partner for a deduction of any kind from their share of the gross income of the partnership should be examined under the normal rules for that type of receipt. The deduction most commonly claimed will be management expenses. When the BVCA guidelines (see CTM36580) were issued it was believed that only the general partner would be entitled to these.  But it is now accepted that limited partners are entitled to relief for their share of the partnership’s management expenses provided the limited partner carries on an investment business within CTA09/S1218.