BIM72210 - Partnerships: Computation & assessment: Profits and Losses Computed at Partnership Level

Where any of the members of a partnership are chargeable to income tax the partnership is required to compute the business profits of any accounting period using the income tax rules as they apply to individuals (ICTA88/S111 (2)).

The computation is made as if the partnership were an individual resident in the United Kingdom. But if the partnership contains a non-resident individual, or a company, then additional computations are required - see BIM72220.

Capital allowances are claimed by the partnership and computed at the partnership level (TMA70/S42 (6)) and are given as an expense in computing the amount of the partnership’s profits. Therefore the profits allocated to each partner are the profits net of capital allowances.