MTT54410 - Administration: Payments and interest: Effect of partnership payments and recovery of partnership payments
Where a partner of a partnership makes a payment of MTT on behalf of that partnership, under a partnership payment notice (see MTT54290) or otherwise, they are entitled to recover that amount from the other partners.
Where a partner makes a payment in respect of the partnership’s MTT liability (under a partnership payment notice or otherwise) the payment is not allowed as a deduction in calculating the partner’s taxable income.
Equally, the reimbursement of the payment by another partner is not to be treated as taxable income in hands of the recipient, or as a deduction in the hands of the payer.
References to taxable income and deductions include for Income Tax, Corporation Tax, Domestic Top-up Tax and Multinational Top-up Tax.
No payment, or reimbursement, of MTT is to be treated as a distribution for either Income Tax or Corporation Tax purposes.
This is set out in paragraphs 37-38, schedule 14 to Finance (No.2) Act 2023.
See also MTT42010 for guidance on the continuity of partnerships, and MTT51310 for guidance on the administration of dissolved partnerships.
Effect on partnership payment notices
Where a payment has been made in respect of an MTT liability by a partnership or any of the partners, and that liability is the subject of a partnership payment notice, both the outstanding liability and the amount due by virtue of the partnership payment notice will be reduced by the amount of the payment.