BIM72215 - Partnerships: Computation & assessment: Claims and Elections Affecting Partnership Profits

Claims and elections, which affect the computation of partnership profits and losses, must be made by the partnership in the Partnership Return (TMA70/S42 (6) - (7)).

This includes all claims to capital allowances (CAA01/S264). For example under the new rules capital allowances are given as an expense in computing the partnership profits. Individual partners cannot make supplementary claims in respect of expenditure they have incurred personally. If you are to give an allowance for such expenditure it must be included in the claim made by the partnership. The exception to this rule is where there is a formal leasing agreement between the partner and the partnership. In these circumstances relief for the capital allowances due is to be given against the partner’s leasing income - see BIM72220.

The claims and elections which must be included in the partnership return are listed at TMA70/S42 (7).