Calculating the taxable profits: costs connected with the capital structure of a business
Fees incurred in connection with the acquisition, alteration or enhancement of how the ownership of a business is structured should generally be disallowed as the costs are regarded as capital expenditure for tax purposes. This will include costs incurred on:
- forming, varying or dissolving a partnership
- the incorporation of a partnership’s business (to a limited company)
- a partnership becoming a limited liability partnership (LLP)
Further guidance is available at BIM35525.