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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Loan relationships: partnerships: computing the gross credits and debits

Determining the gross debits and credits of a company partner

CTA09/S381 sets out how to determine the gross debits and credits of a particular company partner.

  • Treat each of the money debts owed by or to the partnership as owed by or to the company partner.
  • Treat the company partner as owing or being owed the money for the purposes of the trade, business or profession that it carries on.
  • Then, where the money debt is a transaction for the lending of money (see CFM31010),
  • treat the company partner as if it is a party to a loan relationship and calculate the debits and credits.

Where the money debt is not a transaction for the lending of money, the company partner can be treated as being party to a deemed loan relationship under CTA09/PT6/CH2, which brings in

  • interest, and
  • exchange gains and losses

on debts that are not loan relationships (see CFM41000).


ABC partnership lends £100,000 to D Ltd.

The members of ABC partnership are

  • Mrs A
  • B Ltd
  • C Ltd.

The loan carries interest at 10% per annum.

For the purposes of their respective tax calculations, B Ltd and C Ltd are each treated as being the creditor in a £100,000 loan relationship. Each company will have gross credits of £10,000, the interest accruing on the loan.